SpiceJet Ltd Share Price – NSE /  BSE

Air Transport Service, Small Cap

SpiceJet today announced that it has fully settled a $90.8 million (Rs 763 crore) dispute with Export Development Canada (EDC) for a total of $22.5 million, now paid in full by the airline. This resolution marks a significant milestone for SpiceJet, resulting in a substantial saving of $68.3 million (Rs 574 crore).

The agreement represents one of the largest settlements in SpiceJetfs history, strengthening the airlinefs fiscal position, eliminating a significant liability from its balance sheet and paving the way for sustained growth and operational efficiency.

As per the terms of the agreement, SpiceJet has acquired full ownership of 13 EDC] financed Q400 aircraft. The transfer of ownership of these 13 planes will result in a substantial reduction in operational costs, strengthening the airlinefs operational capabilities and fleet management. It also brings long]term financial benefits, relieving SpiceJet from the obligation of monthly rental payments for these aircraft and further reinforcing the airlinefs financial stability.

These aircraft will also enable SpiceJet to launch additional flights on regional and UDAN routes. Starting October 27, 2024, the airline has begun operating several new routes using the Q400, including Delhi]Amritsar]Delhi, Guwahati]Patna]Guwahati, Kolkata] Patna]Kolkata, Delhi]Patna]Delhi, and Delhi]Darbhanga]Delhi. Recently, SpiceJet also introduced services on the Shivamogga]Chennai, Shivamogga]Hyderabad, and Chennai-Kochi sectors with the same aircraft. SpiceJet plans to roll out another 18 flights in phases as more Q400 aircraft return to service.

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As per the terms of the agreement, SpiceJet has acquired full ownership of 13 EDC‐ financed Q400 aircraft.

The transfer of ownership of these 13 planes will result in a substantial reduction in operational costs, strengthening the airline’s operational capabilities and fleet management. It also brings long‐term financial benefits, relieving SpiceJet from the obligation of monthly rental payments for these aircraft and further reinforcing the airline’s financial stability.

This is one of the largest settlements in SpiceJet’s history, strengthening the airline’s fiscal position, removing a significant liability from its balance sheet and paving the way for sustained growth and operational efficiency, the company stated in press release.

The airline added that, “These aircraft will also enable SpiceJet to launch additional flights on regional and UDAN routes. Starting 27 October 2024, the airline has begun operating several new routes using the Q400, including Delhi‐Amritsar‐Delhi, Guwahati‐Patna‐Guwahati, Kolkata‐ Patna‐Kolkata, Delhi‐Patna‐Delhi, and Delhi‐Darbhanga‐Delhi.

Recently, SpiceJet also introduced services on the Shivamogga‐Chennai, Shivamogga‐Hyderabad, and Chennai‐ Kochi sectors with the same aircraft. SpiceJet plans to roll out another 18 flights in phases as more Q400 aircraft return to service.”

Ajay Singh, chairman and managing director, SpiceJet said, “We are very pleased to have paid the settlement amount in full and closed this agreement with EDC. This resolution allows us to move forward with a strengthened balance sheet and focus on getting our Q400 aircraft back into service as quickly as possible. We are excited to expand our regional operations and enhance connectivity across key routes, including those under the UDAN scheme, with our revitalised fleet.”

SpiceJet is a low-budget air carrier. The airline operates a fleet of Boeing 737s, Q-400s & freighters and is the country's largest regional player operating multiple daily flights under UDAN or the Regional Connectivity Scheme. The airline also operates a dedicated air cargo service under the brand name SpiceXpress offering cargo connectivity across India and on international routes.

The low-cost air carrier’s standalone net profit declined 26.69% to Rs 149.96 crore on 15.3% fall in revenue from operations to Rs 1,695.52 crore in Q1 FY25 over Q1 FY24.

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These new routes will connect Jaipur with Varanasi, Amritsar and Ahmedabad, while also linking Ahmedabad with Pune.

This expansion follows the recent launch of 32 new flights in October 2024, including two international flights connecting Delhi with Phuket.

Last month, the company also commenced UDAN flights linking Shivamogga in Karnataka with Chennai and Hyderabad, and introduced double daily flights between Chennai and Kochi, enhancing connectivity across key regional and metropolitan cities.

Debojo Maharshi, chief business officer, SpiceJet, said, “We are excited to announce the launch of new flights from Jaipur to Varanasi, Amritsar, and Ahmedabad, as well as from Ahmedabad to Pune, providing our passengers with greater flexibility and convenience. These new flights reflect our commitment to supporting passenger demand across tier‐II cities and beyond. With our expanded winter schedule, including international and UDAN routes, we aim to provide our customers with greater convenience, affordability, and seamless travel experiences.”

SpiceJet is a low-budget air carrier. The airline operates a fleet of Boeing 737s, Q-400s & freighters and is the country's largest regional player operating 63 daily flights under UDAN or the Regional Connectivity Scheme. The airline also operates a dedicated air cargo service under the brand name SpiceXpress offering cargo connectivity across India and on international routes.

The low-cost air carrier standalone net profit declined 26.69% to Rs 149.96 crore on 15.3% fall in revenue from operations to Rs 1,695.52 crore in Q1 FY25 over Q1 FY24.

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The agency has, meanwhile, affirmed the company’s short term rating at ‘ACUITE A4’.

Acuité Ratings stated that the upgrade in the rating takes into account the regularisation of the delays in the debt obligations from Yes Bank by Spice jet along with an improved liquidity position with the infusion of funds through QIP.

The company has raised Rs 3000 crore through QIP (qualified institutional placement) in September 2024., the major investors incudes Goldman Sachs, Morgan Stanley, Nomura Singapore, etc.

The company has planned to utilize this fresh QIP proceeds to pay off the all the statutory dues, settlement with their lessors, employee salaries, general corporate expenses, ungrounding of fleet, expansion from fresh fleets, etc. as per their revival plan in the aviation industry.

As per the management, they have cleared all the pending airport dues, employee salaries and statutory dues (GST & TDS) amounting to Rs 684.99 crore as on 30 September 2024.

Currently, SpiceJet's operational fleet of is 24. SpiceJet is planning to settle with the lessors and few of the settlement already took place post QIP.

SpiceJet has booked revenue from operations of Rs 1,708.24 crore in Q1 FY 24-25 against Rs 2,003.59 crore in Q1 PY 23-24, thereby reducing the topline by 14.74%. This is mainly due to reduction in fleet size which led to declining market share over the period of time. The EBIDTA and net profits of the company is Rs 43.18 crore and Rs. 158.19 crore for Q1 FY 24-25 against Rs 265.46 crore and Rs 197.63 crore for Q1 PY 23-24 respectively.

However, the rating is constraint due to the weak earning profile dented through the continuous losses from FY 2019 till FY2024 accordingly impacting the financial profile and liquidity position. Further there remains an execution risk as per their revival plan in the aviation industry and timely repayment of their operational and financial creditors post QIP.

SpiceJet Limited was initially set up as an air taxi provider. In 1993, the company diversified into domestic aviation service provider. SpiceJet follows the low-cost carrier (LCC) business model with an objective to deliver the lowest air fares with the highest consumer value, to price sensitive consumers making flying accessible for the wider population.

The scrip slipped 2.97% to currently trade at Rs 59.75 on the BSE.

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