Amidst ongoing court cases, SpiceJet posts net profit for Q3 after IndiGo

Domestic airline SpiceJet posted a net profit of INR 42.5 crore for December 31, 2021, which ended the quarter on Tuesday, February 15. In the same quarter in the year-ago period, the firm had reported a loss of INR 66.7 crore.

The low-cost carrier’s revenue for the October to December 2021 period grew 33.8% on a year-on-year (YoY) basis to INR 2,263 crore as against INR 1,692 crore in the same quarter last fiscal.

Ajay Singh, Chairman and Managing Director, SpiceJet

Ajay Singh, Chairman and Managing Director, SpiceJet, said SpiceJet’s profit in Q3 FY2022 was driven by excellent logistics operations, rebound in passenger traffic and various accommodations from aircraft manufacturers and lessors.

“The passenger industry witnessed the much-needed turnaround in the third quarter as COVID-19 cases ebbed in the first half of the quarter, travel picked up significantly and there was finally hope that the worst was behind us. However, that changed by the second half of December as Omicron halted that recovery.SpiceJet’s performance would have been much better but was impacted by the unexpected delay in the return to service of the 737 MAX, rising fuel costs and certain exceptional adjustments. There are renewed signs of recovery in the passenger segment and the logistics segment continues to remain strong."Ajay Singh, Chairman and Managing Director, SpiceJet

The airline’s earnings before interest, taxes, depreciation and amortization (EBITDA) slipped 52.4% to INR 116.4 crore. The EBITDA in the year-ago period was recorded at INR 244.3 crore (YoY). The EBITDA margin in the quarter under review stood at 5.1%, against 14.4% in the same quarter last fiscal. SpiceJet's one-time loss stood at INR 77.4 crore.

The firm said it operated 390 charters to various countries carrying over 64,000 passengers and launched 40 new routes during the quarter to strengthen its domestic network. It had the best passenger load factor amongst all airlines during the quarter at 85.2%.

SpiceJet back in the black after 7 quarters, reports INR 42.5 crore Q3 net profit

The low-cost carrier, which is going through turbulent times, was scheduled to announce the financial results for the quarter ended December 2021 on Monday, February 14. It postponed its scheduled board meet to Tuesday, February 15 saying the company's audit committee meeting for approval of December quarter results was inconclusive due to paucity of time.

SpiceXpress, the Company’s logistics platform, continued on its growth trajectory reporting increased revenue of INR 584 crore for the reported quarter as compared to INR 498 crore in the last quarter, a jump of 17%. 

It said that while there is uncertainty in the revenue operation in the short-term which is expected to normalise in the long-term. While passenger business was suspended due to very low demand during the lockdown period and/or restricted operation period, it earned a profit of INR 21.5 crore from its cargo business.

SpiceJet’s stock rose 7.34% to INR 63.60 on BSE after the Q3 result announcement.

Investors cheered SpiceJet’s Q3 earnings as the stock rose 7.34% to INR 63.60 on the Bombay Stock Exchange at 3 PM on February 15, after the results announcement. At 2.50 PM, SpiceJet was trading at INR 63.30 on BSE, up 7% from its previous close while the benchmark Sensex rose 3% to 58,068 points.

SpiceJet, which controls 10.3% of the local market, was overtaken by Go Airlines India Ltd. in December 2021 as India’s second-largest airline. SpiceJet’s race to reclaim the No. 2 spot will also face stiff competition from Air India Ltd., which is headed for a revamp after Tata Sons formally took over the indebted carrier in January.

In November 2021, SpiceJet announced that it has entered into a settlement agreement with Boeing wherein Boeing has agreed to provide certain accommodations and settle the outstanding claims related to the grounding of 737 MAX aircraft and its service return.

ALSO READ - SpiceJet and Boeing reach a settlement agreement on the 737 MAX aircraft deal

The settlement not only brought back into operations the grounded 737 MAX aircraft but also paved the way for the induction of more efficient and younger MAX aircraft into SpiceJet’s fleet, the firm said. The settlement also ensures the resumption of new aircraft deliveries from the order of 155 MAX aircraft.

The airline is now aiming for a stronger comeback in 2022 by utilising and expanding its 737 MAX fleet for better yield and flying experience, launching new customer-centric services, optimising daily operations based on IT and expanding network both domestically and internationally.

Rolls-Royce Holdings, the engine maker known for powering Airbus and Boeing workhorse jets, expects a fully-electric small aircraft in three to five years, a top executive said.

The first commercial application of P-Volt, a battery-electric system developed by Rolls-Royce, will have about 600-kilowatt hours of power, which will enable flying six to eight people as far as 80 nautical miles, Rob Watson, president of the company’s electrical division, said in an interview in Singapore on Monday, February 14.

Rolls-Royce Holdings, the engine maker known for powering Airbus and Boeing workhorse jets, expects a fully-electric small aircraft.

That range will keep improving with better battery technology, and may eventually be able to fly as much as 400 km in the 2030s, London-based Watson, who’s attending the biennial Singapore Airshow this week, said.

“We are confident in the technology. Now we need to scale it so it can have a meaningful economic influence," said Watson, who was promoted to an executive role this year. “I think that’s where you see urban air mobility and regional air mobility, aircraft with 8-18 seats, becoming a real possibility in the next three to five years." 

Earlier ‘Spirit of Innovation’ from Rolls-Royce becomes the world’s fastest all-electric aircraft

A slew of companies around the world, from startups to established aerospace giants, as well as some automobile manufacturers, are at different stages of developing aircraft that are powered by an alternative source of power, as pressure builds on the industry to cut back on emissions.

ALSO READ - ‘Spirit of Innovation’ from Rolls-Royce becomes world’s fastest all-electric aircraft

The options being worked on include sustainable aviation fuel, SAF, hydrogen, fully electric, and hybrid-electric. Rolls-Royce’s electric propulsion system can be used for both electric vertical takeoff and landing, or so-called eVTOLs or commuter aircraft.

One of its customers, Vertical Aerospace Group Ltd., has already grabbed orders from American Airlines Group Inc., Virgin Atlantic Airways Ltd. and aircraft lessor Avolon Holdings Ltd., and says its VA-X4, a zero-emission four-passenger aircraft, can fly as fast as 200 miles per hour over a range of more than 100 miles. 

“If you want to fly hundreds of people and thousands of miles, which is the single-aisle market, a battery is never going to do that because you’ll just be limited by the energy density of a battery and the weight of the battery. If you want to get to net-zero on those platforms, you will achieve that principally through SAF and then through hydrogen.We need to make supply selection decisions in the next year, year and a half. We’re making decisions about our strategic suppliers this year."Rob Watson, President (Electrical Division), Rolls Royce

However, Watson doesn’t expect narrowbody aircraft, the most popular models for Airbus and Boeing, to turn fully electric. 

Rolls-Royce is currently in talks with suppliers for battery cells as it approaches the crucial stage of certification, Watson said. While Rolls-Royce will design and assemble the packs, it won’t manufacture battery cells, he said.

(With Inputs from Bloomberg)

Budget carrier AirAsia India said its pact with full-service carrier Air India on passenger transfer in case of disruption in operations is a "standard" one and it has similar arrangements with other airlines as well.

Air India and AirAsia India have entered into an agreement that will allow them to carry each other's passengers in case there is a disruption of operations, according to a communication.

"The agreement under discussion is standard agreement airlines enter with each other to re-accommodate guests in the event of last-minute disruptions. We already have similar agreements with almost all other Indian carriers," an AirAsia spokesperson said in a statement.

Air India and AirAsia India sign an interline passenger transfer agreement

Airlines typically enter into such interline agreements with other carriers, especially on routes where they operate a limited number of flights to prevent inconvenience to passengers in case of disruptions. These disruptions could occur as a result of extenuating circumstances such as delays, cancellations, diversion of flights.

The document seems to give first preference to Air India customers with a rule stating taking on AAIPL passengers should not affect departure times of AI flights. Another clause clarifies that paying AI passengers will get priority over transferred AirAsia passengers for AI’s business class seats.

Both airlines are part of the Tata Group. The arrangement, effective for two years starting from this month, will enable airport teams of both Air India and AirAsia to offer alternative first available flights so that inconvenience to passengers is minimised.

Carriage of passengers will be on an "as available" basis as determined by the airport manager of accepting airline.

The two carriers have entered into the IROPS (Irregular Operations) arrangement through a pact, which allows the transfer of passengers to each other's flights in case of disrupted operations, according to the communication.

However, the carriage of passengers will be on an "as available" basis as determined by the airport manager of accepting airline, it stated. On January 27, Tata Group completed the takeover of Air India.

Tata group now has four airline brands in its portfolio: Air India, its low-cost arm Air India Express, AirAsia India (in which it owns 83.6% stake), and Vistara (which is a 51:49 joint-venture with Singapore Airlines). Barring Vistara, the Tata group is likely to put in effect greater synergies among its portfolio airlines.

The government will start working on selling ground-handling arm Alliance Air of erstwhile national carrier Air India and the Expression of Interest (EoI) is expected in the next fiscal, an official said.

"We already have the Cabinet approval for selling the subsidiaries of Air India. So we will come out with an EoI inviting bids for one of the ground-handling arms in the next fiscal," an official told PTI.

Currently, four Air India subsidiaries - Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL) or Alliance Air, Air India Engineering Services Ltd (AIESL) and Hotel Corporation of India Ltd (HCI) are with Air India Assets Holding Ltd (AIAHL), which is a special purpose vehicle set up in 2019 for holding non-core assets and debt of Air India.

The government will start working on selling ground-handling arm Alliance Air

The government had transferred the ownership of Air India to Tata Group in January after the latter emerged as the winning bidder for buying the loss-making carrier.

The official further said that it is also to be decided whether the Air India Specific Alternative Mechanism (AISAM) for Air India privatisation or the Alternative Mechanism for CPSE disinvestment would be the decision-making ministerial panel for privatising these subsidiaries.

The AISAM is headed by the Home Minister and comprises the Finance Minister, Commerce and Industry Minister and Civil Aviation Minister.

The government had transferred the ownership of Air India to Tata Group in January

The Alternative Mechanism of CPSE disinvestment comprises Road Transport and Highways Minister, Finance Minister and Commerce and Industry Minister.

Separately, AIAHL also has over INR 14,700 crore worth of non-core assets like land and building of Air India which also has to be monetised. These assets were transferred to AIAHL before the airline's privatisation.

Air India has asked its cabin crew to wear minimal jewellery to avoid delays at security checks and not to visit duty-free shops after completing the immigration process as part of the Tatas-owned airline's efforts to improve on-time performance.

Since it took over loss-making Air India on January 27, Tatas have been working on ways to improve the overall performance of the carrier.

The cabin crew must also adhere to the uniform regulations and wear minimum jewellery to avoid any delays at customs and security checks, Air India officiating executive director for Inflight Services, Vasudha Chandna said in a communication to cabin crew on Sunday, February 13.

Air India has asked its cabin crew to wear minimal jewellery to avoid delays at security checks.

Once onboard, the cabin crew should only wear the items of PPE kit which are required to be worn as per the latest circular in the shortest possible time and complete the mandatory checks before/well within the prescribed timings, it said.

Asking the cabin crew staff not to delay the mandatory preflight check clearance, which may be attributed to the cabin crew, it has advised the cabin supervisor to give clearance for boarding to the ground staff before or well within the prescribed timings.

The cabin crew has also been asked not to consume beverages or eat food before the boarding of the passengers or during that process and assist in swift boarding of the guests, Chandna said in the communication.

Once on board, the cabin crew should only wear the items of PPE kit which are required to be worn

Also, there should not be any delay in closing the aircraft door on the part of the cabin crew, the communication said. Besides, the airline has also sought the cabin crew proceeding to the cabin crew movement control office or MCO or immigration(at outstations) after completing their check-in formalities.

The cabin crew must not wait for the commander at movement control/check-in counter (at outstation) and proceed to the aircraft well within time, it stated.

FlyBig, the regional carrier, is likely to induct two aircraft, sub-leased by GIFT City’s Vman Aerospace, by March-end.

A source told Hindu BusinessLine that Vman Aerospace leased the two ATR 72-600s aircraft from Dubai Aerospace Enterprise The registration numbers for the aircraft will be VT TMC and VT TMT said the source.

A source from the airline said with the induction of these two aircraft, the regional carrier will have three aircraft on its fleet. FlyBig also plans to wet-lease another Q400 aircraft soon. 

FlyBig plans to induct 2 aircraft in the near future

Earlier Flybig planned to induct five aircraft by the end of March 2022, and 75,000 seats to offer with over 35 departures in a day. It will operate mainly under UDAN, connecting the Northeast and Central East part of India.

It’s been over a year since the airline was started by pilot-turned entrepreneur Sanjay Mandavia, who planned to induct at least 24 aircraft and establish FlyBig as a UDAN-4 leader. It was awarded 15 routes. Mandavia had earlier shown interest in acquiring Jet Airways under the insolvency process.

“We plan to induct 24 aircraft, to have a strong base in tier-2 and 3 markets. For that to happen, we need a good market cap. We plan to invest INR 100 crore for expansion later,” said Mandavia.

Earlier Flybig planned to induct five aircraft by the end of March 2022, and 75,000 seats to offer with over 35 departures in a day.

However, due to an acute cash crunch, and with no investors on board, FlyBig is currently utilising its promotor’s funds. It currently flies seven routes and is planning to start a flight on the Shillong-Delhi route soon. 

People in the know said the company is in conversation with multiple investors and may soon find one.  The airline’s Passenger Load Factor (PLF) has been increasing on a month-on-month basis, albeit marginally.

In December and November 2021, it carried 0.10 lakh passengers compared to 0.8 lakh passengers in the month before that. However, it has a marginal market share of 0.1%, according to the Directorate General of Civil Aviation.

In December and November 2021, it carried 0.10 lakh passengers compared to 0.8 lakh passengers in the month before that.

ALSO READ - EaseMyTrip forms an exclusive partnership with Flybig

EaseMyTrip, which had announced earlier that it had entered into a partnership with Flybig to sell the latter’s tickets exclusively on its platform, will process all the bookings on Flybig made by any other online travel portal.

Flybig is a regional carrier based in India. The airline commenced operations in December 2020 with the launch of a twice-weekly Delhi-Shillong service. It is promoted by Gurugram-based Big Charter Private Limited. It is focused on connecting tier-2 cities within India.

(With Inputs from The Hindu Business Line)