Flying cargo helped SpiceJet in Q1; future path still turbulent

While the June quarter was expected to be a washout for airlines due to the pandemic, higher cargo revenues have brought a small sigh of relief for SpiceJet Ltd. The low-fare airline said cargo revenues increased by 144% year-on-year (y-o-y) to ₹236 crore.

Of course, cargo revenues can only do so much for a passenger airline. Total operating revenues fell by 83% y-o-y to ₹514 crore. Loss at the Ebitdar (earnings before interest, taxes, depreciation, amortization and lease rentals) level stood at ₹166.5 crore. In the same period last year, SpiceJet had reported a positive Ebitdar of ₹684 crore.

True, fuel costs have been lower but how much can one favourable metric help when load factors have dropped sharply? Non-fuel costs are a pain, especially when the scale of operations has seen such a drastic decline. Indian airlines had to close operations for most part of the June quarter due to the nationwide coronavirus lockdown.