NEW DELHI: As COVID impacts airlines financially , which today said has reported a net loss of Rs 998.3 crore for 2020-21 fiscal, has announced to raise Rs 2,500 crore to fund its working capital requirements.
“The intensity with which the second wave of Covid-19 struck and the unimaginable devastation it has caused, both for the already battered travel industry and generally, will take time to heal. To ensure our long term growth and sustainable operation we have decided to raise funds of up to Rs 2,500 Crore. These funds will be used to significantly strengthen our balance sheet,” Ajay Singh, Chairman and Managing Director, SpiceJet, was quoted in the release.
SpiceJet is the third Indian airline after Go First (earlier GoAir) and IndiGo, who have also announced to raise capital. While Go First is in the process of launching an IPO, IndiGo has announced to raise Rs 3,000 crore.
The airline reported a lower net loss of Rs 235.3 crore in the fourth quarter of FY21 against a loss of Rs 807.1 Crore during the same quarter last year, as it continues to show compensation for grounding of Boeing 737 MAX as earnings.
“… Consequently, and without in any manner limiting or prejudicing the legal and the commercial rights of the Holding Company towards its claim in this regard, certain costs (including, inter alia, aircraft and supplemental lease rentals and certain other identified expenses relating to the Boeing 737 MAX aircraft) aggregating Rs 141.1 crore and Rs 560.4 crore for the quarter and year ended 31 March 2021, respectively, have been recognised as other income,” the airline said in a note.
The airline said that they have seen a substantial improvements in cargo revenues, as passenger revenues was hit due to COVID, and has decided to hive off cargo as a separate subsidiary.
“While there has been significant losses suffered on the passenger side of business the dedicated cargo operations continued to provide much required lifeline to our overall operations. On a segment basis the revenue from cargo operations increased by 518% aggregating to Rs 1,117.5 crore for FY2021,” it said adding that the company continues to see significant negative impact to demand for air travel.
The airline, however, says that the worst is over for the industry, as vaccination touch record numbers.
“With vaccination touching record numbers and travel demand slowly picking up, we hope that the worst is behind us but we remain extremely cautious about the future,” Singh was quoted in the release.
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