SpiceJet Ltd.’s quarterly loss widened as ballooning fuel costs worsened the airline’s financial distress and offset gains from recovering air travel demand.
The no-frills carrier posted a loss of 8.38 billion rupees ($103 million) for the three months through Sept. 30, 49% higher than the deficit in the same quarter last year, according to an exchange filing Monday.
“The high aviation turbine fuel prices and depreciating rupee continue to be a downer for the industry,” Chairman Ajay Singh said in the post-earnings filing. “A near-to-normal business environment and an upturn in business and leisure travel, coupled with government aid, are giving hope to positivity.”
Revenue rose about 45% to 19.5 billion rupees. Total costs climbed 40% to 29.4 billion rupees, while fuel expenses jumped 99% to 12.3 billion from a year earlier.
SpiceJet, which has posted losses for the last four fiscal years, is struggling to turn around as competition heats up in India’s already crowded skies. The newest airline, Akasa, is adding more domestic routes, while Air India Ltd. is being revamped under its new owner, Tata Group.
The company’s local market share has plunged from 9.5% in June to 7.3% in September, according to data published by the Indian aviation regulator, pushing its rank down to No. 5 from No. 2 among local carriers.
SpiceJet expects significant improvement in its operating performance as it plans to spin off the cargo and logistics arm and reached settlements with its major partners, Singh said.
The board has approved raising fresh capital through the issue of eligible securities to qualified institutional buyers, according to the filing.
The passenger traffic in India jumped 65% to 87.4 million in nine months to September, but is still 17% below pre-pandemic times.
The airline has faced criticism for reporting frequent incidents of technical glitches in its aircraft. This prompted India’s air safety regulator to extend the 50% restriction on the number of SpiceJet flight departures and place the airline under “enhanced surveillance” until Oct. 29.
To bolster its diminishing funds, SpiceJet was in discussions with bankers to raise as much as $200 million in fresh capital, Singh had informed exchanges in a filing in August.