NEW DELHI: Budget carrier SpiceJet has posted a net loss of Rs 38.1 crore for the quarter ended June 2018, mainly due to higher fuel cost and arbitration award. The company had reported a profit of Rs 175.2 crore in same period last year.
Revenue during the quarter increased 19.6 per cent to Rs 2,236 crore compared to Rs 1,869.5 crore in corresponding period last fiscal.
The airline, however, said that it would have reported a net profit of Rs 25.4 crore if it did not have to make provision on account of an arbitration award. “The company has taken action of Rs 63.5 crore an exceptional item on account of an arbitration award that cited interest payable of Rs 92.5 crore and interest receivable of Rs 29 crore for the company,” SpiceJet said.
An arbitration committee formed by the Delhi High Court had ruled that SpiceJet will have to pay a refund of Rs 579 crore plus interest to the earlier promoter, Sun Group.
SpiceJet’s Q1 losses come at a time when the aviation industry is struggling to keep up with the rising fuel prices and depreciating rupee value.
The airline too admitted that it additionally paid an amount of Rs 203 crore on account of increase in the cost of Aviation Turbine Fuel (ATF) and an amount of R 44 crore on account of forex losses as compared to Q1FY17.
Earlier, owing to similar reasons plus low airfares, market leader IndiGo’s profit crashed by 97 per cent and Jet Airways has been deferred posting its Q1 results. Multiple reports said that Jet is heading towards operation shut down and is in need of funds to keep flying.
Aviation minister Suresh Prabhu, without elaborating, on Tuesday said that airlines are struggling with the high cost of fuel not just in India, but across the world. Civil Aviation Secretary RN Choubey said that if the GST Council decides to include ATF in GST, it will come as a big relief to the industry.