SpiceJet Set to Announce Q1FY25 Results on Time After a Year – What’s Next for the Struggling Airline

SpiceJet, once a leading airline but now facing serious challenges, will release its Q1FY25 financial results on August 14, 2024. This is noteworthy because it’s the first time in a year that the airline is declaring its results on time. Last year, the airline delayed its Q2, Q3, and Q4 results, with the last two quarters and full-year reports being released together in July.

In Q1FY24, SpiceJet reported a profit of ₹197.64 crore, but the airline ended FY24 with a loss of ₹409 crore, a stark contrast to rival IndiGo’s huge profit of ₹8,170 crore. At one time, IndiGo and SpiceJet were fierce competitors, but those days seem long gone.

This results announcement comes at a time when Mumbai airport briefly warned of possible disruptions to SpiceJet flights starting August 13, though the airline later said it had resolved “minor financial issues.” However, there are still ongoing delays in salary payments and dues to the government.

Shrinking Operations

In Q1FY25, SpiceJet carried 16.71 lakh domestic passengers on 12,038 flights within India, a decrease of 15% in flights and 17% in passengers compared to the same period last year. The airline’s capacity, measured by Available Seat Kilometre (ASK), dropped by 18%. Its international operations have fared better, as these routes are crucial for earning foreign currency. While domestic operations have declined sharply, international departures were down only 6.5%, and passenger numbers remained steady.

In June, SpiceJet flew just 4.99 lakh domestic passengers, holding a market share of only 3.8%. This is a significant drop from December 2014, when the airline had a market share of 10.4% and carried 6.71 lakh domestic passengers, even though the market was half the size it is today.

Data from aviation analytics company Cirium shows that SpiceJet has nearly exited major metro routes, which are vital for most airlines. The airline has many flights listed for sale, but not all are being operated, indicating cancellations or operational issues. For August, SpiceJet has 882 weekly flights scheduled, with Delhi as its main hub at 214 weekly flights. Surprisingly, Dubai has more SpiceJet departures than Mumbai, India’s second-largest airport.

The airline’s fleet is also struggling. Despite plans to add planes after securing funding and settling with lessors, six out of seven MAX 8 aircraft are grounded, with many Q400s also not in service. SpiceJet maintains a fleet of over 20 operational planes, a requirement for continuing international operations. Its cargo subsidiary, SpiceXpress, no longer has active planes, though the cargo division still brings in some revenue.

What to Expect in the Results?

SpiceJet urgently needs cash, and the board has already approved raising ₹3,000 crore. The big question is how and when this will happen. Auditors are likely to continue raising concerns about the airline’s ability to survive. While IndiGo reported a Q1 profit of ₹2,729 crore, which included compensation from Pratt & Whitney, it will be a significant boost if SpiceJet can report any operational profit. However, the real challenge lies in getting the airline back on its feet, flying its grounded planes, and overcoming what seems like a never-ending crisis. SpiceJet could be facing a critical now-or-never moment.