The grounding of Jet Airways has helped the aviation industry improve its financials with SpiceJet reporting its highest-ever net profit in the June quarter. The profits were driven by other income, including reimbursements from Boeing for the revenue loss due to the grounding of 737 Max aircraft. The increase in yield was aided by higher passenger traffic following the grounding of Jet Airways besides expanding its fleet size to cater to more routes and passengers.
The no-frills airline made a net profit of INR 261.7 crore (USD 36.84 million) during the first quarter of the current fiscal against a loss of INR 38.1 crore (USD 5.36 million) during the same period last year. The airline said that the its total income rose to INR 3,145.3 crore (USD 442.73 million) for the quarter ending June 2019 as against Rs 2,253.3 crore (USD 317.17 million) for the corresponding quarter last year.
The airline also said that the best-ever performance is despite the fact that the airline has now moved to new accounting standards that impacts financial numbers.
“Robust business model.”
“Effective from 1 April 2019, the airline adopted the new accounting standard IND AS 116 which effectively capitalised operating leases, and as a result of this lease rentals are now reflected as interest and depreciation for the quarter ending June 2019. Additionally, owing to the retrospective treatment of this standard there is a reduction of INR 302.2 crore from retained earnings status as at April 1, 2019,” said the company.
“We added 32 aircraft to our fleet, expanding at a pace unprecedented for a sector plagued by crisis, showcasing our robust business model and proven operational capabilities,” said Ajay Singh, chairman and managing director of SpiceJet.