New Delhi: SpiceJet on Friday reported a net profit of Rs 73.2 crore in the third quarter ended December 2019 and said Boeing has offered an interim compensation with respect to the grounding of MAX planes, a development that has substantially hit the airline’s profitability.
The carrier, which has been aggressively expanding its operations, expects to take a final decision on Boeing compensation before March-end, according to its Chief Financial Officer Kiran Koteshwar.
“Standalone profit from air transport services (airline) was Rs 115 crore. Further, this profit is after a non-cash forex charge on account of Ind AS 116 of Rs 75.9 crore without which the profit would have been Rs 190.9 crore,” the airline said in a release.
Ind AS 116 or Indian Accounting Standard 116 pertains to leases.
In the December 2018 quarter, the carrier had recorded a profit of Rs 55.1 crore.
The company’s total income rose to Rs 3,917.34 crore in the latest December quarter, from Rs 2,530.84 crore in the same period a year ago.
Operational revenue in the latest December quarter climbed 47 per cent to Rs 3,647.1 crore. In the year-ago period, the same stood at Rs 2,486.8 crore.
SpiceJet Chairman and Managing Director Ajay Singh said the airline has done remarkably well in the latest quarter, despite a substantial profit hit from the grounding of MAX aircraft.
“We were expecting the MAX to return to service by January 2020 but that hasn’t happened. The continued grounding and the delay in its return to service have undoubtedly hit our growth plans adversely and resulted in inefficient operations and increased costs,” Singh said.
Last year, Boeing 737 MAX planes were grounded worldwide in the wake of two fatal crashes involving the aircraft.
SpiceJet is the only domestic carrier having MAX aircraft in its fleet. The budget airline grounded 13 such planes in March last year.
In the December quarter, SpiceJet signed a definitive codeshare agreement with Emirates as well as a memorandum of understanding with Gulf Air for interline and codeshare agreements.
Code sharing allows an airline to book its passengers on its partner carriers and provide seamless travel to destinations where it has no presence. An interline arrangement refers to a pact to issue and accept tickets for flights that are operated by the partner airline.
Singh said the airline expects to grow profitably while maintaining tight control over costs.
The airline has a fleet of 82 B737 and 32 Bombardier Q-400s planes as well as five B737 freighters.
Shares of SpiceJet on Friday jumped nearly 6 per cent to close at Rs 89.60 apiece on the BSE.