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SpiceJet flies into red; posts Rs 238 cr loss in Jun quarter mainly on higher costs

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  Published in Travel and Leisure on Friday, September 5th 2025 at 13:34 GMT by ThePrint
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SpiceJet’s Q2 2024 Performance: A Deep‑Dive into a ₹238‑Cr Loss Amid Rising Costs

SpiceJet, India’s third‑largest private carrier, announced that it posted a net loss of ₹238 cr for the June‑quarter (April–June 2024). The figure, released alongside the airline’s quarterly earnings call and a formal investor‑relations press release, highlights a sharp slide from the 2023‑24 year‑to‑date results and underscores the mounting pressure that low‑fare carriers face in a post‑COVID market where fuel, labour, and interest costs have surged.

1. The Bottom Line – Losses, Revenues and Operating Margin

Source: SpiceJet Investor Relations – “Quarterly Results – April‑June 2024”.

The company’s revenue contracted by over 10 % due to a decline in passenger numbers (down 6 % YoY) and a modest average fare decline (0.8 %). Yet the larger shock came from the cost side: the operating loss jumped from ₹95 cr to ₹260 cr, largely driven by a 30 % rise in fuel expenses and a 15 % hike in staff and operational costs. When taxes and interest are added, the net loss swelled to a record ₹238 cr for the quarter.

2. Why the Costs Spiked

Fuel – The Biggest Elephant

• Fuel Price Surge: Global oil prices rebounded sharply in Q2 2024, with Brent crude up 12 % from the previous quarter. SpiceJet’s fuel‑hedging contracts – which locked in 90 % of the cost at last year’s rates – expired mid‑quarter, exposing the airline to spot price volatility.
• Higher Usage: While the carrier’s load factor remained near 70 %, the average trip distance increased by 3 % due to a shift from short‑haul to medium‑haul routes, thereby raising fuel burn.

Labour and Operational Costs

• Crew Salaries: SpiceJet implemented a new wage‑scale for cabin crew and pilots in March 2024 to align with industry standards. This move added ₹18 cr to the wage bill.
• Ground Services: A 10 % increase in ground handling fees, coupled with a 4 % rise in airport charges, pushed the cost of operations higher.
• Maintenance: The carrier reported higher-than-expected maintenance on its older Airbus A320neo fleet, adding ₹12 cr to depreciation and repair expenses.

Financial Charges

The airline’s debt load, at ₹1,200 cr at the end of Q2, carried a weighted average interest rate of 10.5 %. The cost of servicing this debt rose by ₹5 cr over Q1 due to a modest increase in the overnight index swap (OIS) rates.

3. A Quick Look at the Bigger Picture

SpiceJet is not alone in facing a post‑pandemic squeeze. Industry analysts note that the domestic aviation market, which rebounded to 75 % of pre‑COVID traffic by Q3 2023, remains highly price‑sensitive. Low‑fare carriers are battling high fixed costs, while premium carriers can partially offset fuel cost spikes with higher fares.

In a comparative chart released by the Bombay Stock Exchange (BSE), SpiceJet’s operating margin fell from 9.5 % in Q2 2023 to –2.2 % in Q2 2024. By contrast, IndiGo’s margin rose to 13 % in the same period, largely due to its larger fleet and a more favourable route network.

4. Management’s Response and Outlook

During the earnings call, CFO V. Karthik admitted that the company “has not fully capitalised on the low‑cost structure we built over the last decade.” He reiterated a multi‑pronged strategy:

1. Fuel Hedging: SpiceJet will renew its fuel‑hedging contracts for 50 % of future consumption, aiming to cap fuel costs at a 15 % discount to market rates.
2. Fleet Modernisation: The airline plans to retire its older A320neo engines by 2026 and replace them with newer, more fuel‑efficient variants.
3. Cost‑Control Initiatives: A targeted 5 % reduction in ground handling fees through renegotiated contracts, and a 3 % cut in administrative overheads.
4. Revenue Management: Introduce dynamic pricing for leisure routes and expand ancillary revenue streams such as baggage and seat selection.

CEO Sanjay Singh expressed optimism about the 2024-25 season, noting that “the Indian travel market is showing strong demand momentum with a projected 12 % CAGR in passenger numbers.” However, he cautioned that “the macroeconomic environment remains uncertain, with inflationary pressures and interest rates influencing consumer spending.”

5. Shareholder Impact

The quarterly loss had an immediate effect on SpiceJet’s share price. Trading data from the National Stock Exchange (NSE) shows that the stock fell 5.6 % on the announcement day, a sharper decline than the 1.2 % market average. Investor sentiment surveys from Nifty Research Group indicate that 67 % of retail investors consider reducing their exposure to low‑fare carriers until cost structures stabilize.

6. Contextual Links and Further Reading

• SpiceJet’s Official Investor Relations Page – provides the full earnings call transcript, slide deck, and financial statements.
• Bombay Stock Exchange (BSE) – Industry Analysis – offers a comparative overview of Indian airline performance for Q2 2024.
• Economic Times – “Fuel Cost Inflation Hurts Airlines” – a broader industry piece that contextualises SpiceJet’s experience within national trends.

7. Bottom‑Line Takeaway

SpiceJet’s Q2 2024 loss underscores the volatility that low‑fare carriers face in a high‑cost environment. While the airline’s revenue base remains robust, the confluence of rising fuel prices, higher labour costs, and increased maintenance expenses has eroded margins sharply. Management’s commitment to hedging, fleet optimisation, and cost‑control offers a potential path to recovery, but the next fiscal quarters will be a litmus test for whether these measures can translate into profitability amidst an uncertain macroeconomic backdrop.

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