(Reuters) -Cash-strapped Indian carrier SpiceJet posted a wider quarterly loss on Wednesday, hit by a drop in passenger traffic and mounting foreign exchange costs.
The company’s loss stood at 6.34 billion rupees ($72.1 million) for the quarter ended September 30, compared with a loss of 4.42 billion rupees a year ago.
SpiceJet has been slow to ramp up its fleet capacity despite multiple fundraises and settlements with lessors.
A significant portion of its Boeing 737 MAX fleet remains grounded, prompting the carrier to rely on wet-lease arrangements, wherein it is paying to use others’ aircraft to boost capacity ahead of the holiday season, which coincides with the fiscal third quarter.
SpiceJet’s number of passengers carried dropped 22.5% to 751,000 during the quarter, data from India’s aviation regulator showed.
The drop in passenger numbers dragged the company’s revenue by about 13% to 7.08 billion rupees.
“While the results reflect short-term costs related to fleet revival and expansion, these are strategic investments that will start yielding results from the current quarter onward,” said Ajay Singh, the company’s chairman and managing director.
An eight-fold jump in foreign exchange losses further pressured margins.
Forex losses stood at 1.88 billion rupees, the equivalent of 26.5% of total revenue.
($1 = 87.8950 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru; Editing by Nivedita Bhattacharjee and Ronojoy Mazumdar)
