Barring Air India, if there is an Indian airline that runs into turbulence often, it is SpiceJet.
Since its founding in 2004, the Gurugram-headquartered airline has changed hands a few times and has run into massive losses regularly, even being on the verge of shutting down, before staging remarkable turnarounds. This year isn’t any different . In the wake of the economic slowdown and the Covid-19 crisis, SpiceJet finds itself in familiar territory with mounting losses and net worth eroding significantly.
On July 29, the airline reported its highest ever quarterly loss of ₹807.07 crore in the March-ended quarter compared to a net profit of ₹56.29 crore in the year-ago period. The airline reported a full-year loss of ₹934.76 crore in 2019-20 compared to ₹316.08 crore in FY19. The only silver lining was that its revenue rose by 42.65 percent to ₹13,206.42 crore.
What is worrisome, however, is that like 2014—when SpiceJet stalled operations before a new promotor stepped in—the airline’s net worth has entered into negative territory at ₹1,579.2 crore as of March 31. “The company has incurred a net loss during the current and previous year, and its current liabilities exceeded its current assets in the balance sheet to date. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the airline’s ability to continue as a going concern,” says SR Batliboi and Associates Llp, the company’s auditors, which had been raising similar concerns during the past quarters.
This story is from the August 28, 2020 edition of Forbes India.
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This story is from the August 28, 2020 edition of Forbes India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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