Daijiworld Media Network - Mumbai
Mumbai, Sept 8: Shares of SpiceJet sank over 5% in intra-day trading on Monday after the budget airline reported disappointing earnings for the first quarter of FY 2025–26 (Q1 FY26), slipping back into losses amid a tough operating environment.
The airline posted a consolidated net loss of Rs 234 crore for the April–June quarter, compared to a net profit of Rs 158.18 crore in the same period last year. On a standalone basis, losses widened slightly to Rs 235.08 crore.
SpiceJet’s operating revenue plunged nearly 36% year-on-year, falling to Rs 1,059.88 crore from Rs 1,646.21 crore in Q1 FY25.
Key Factors Behind the Weak Performance:
The airline attributed the poor showing to a combination of external and internal challenges:
• Geopolitical tensions and restricted international airspace reduced demand for leisure travel.
• Delays in reactivating grounded aircraft due to global supply chain bottlenecks and engine maintenance issues.
• An overall decline in operational capacity impacted earnings.
Management’s Response
Ajay Singh, Chairman and Managing Director of SpiceJet, said the results highlight the "extraordinary challenges" facing the aviation industry.
“Geopolitical turbulence, airspace restrictions, and persistent supply chain issues have impacted performance. But we are resilient and focused on improving fleet reliability, reducing costs, and expanding our network,” Singh noted.
Despite the downturn, he expressed optimism, citing the rapid growth of India’s aviation and tourism sectors as potential tailwinds in the upcoming quarters.
Other Financial Highlights:
• EBITDA loss stood at Rs 18 crore, a sharp reversal from a Rs 402 crore profit in Q1 FY25.
• Total expenses fell 25%, to Rs 1,435.04 crore from Rs 1,919.58 crore a year ago.
• Key operating metrics held steady:
o Passenger Load Factor (PLF): 86%
o Passenger Revenue per Available Seat Kilometer (PAX RASK): Rs 4.74
Market Reaction & Analyst View
Following the results, domestic brokerage Nuvama downgraded its target price for SpiceJet shares to Rs 40 (from Rs 48 earlier) while maintaining a ‘Hold’ rating. The brokerage cited lower-than-expected capacity, muted load factors, and elevated costs as primary concerns.
As SpiceJet navigates through ongoing turbulence, the market will be watching closely for signs of stabilization in operations and strategic fleet revival efforts in the coming quarters.