Debt-ridden budget carrier SpiceJet has turned profitable for the first time in seven quarters posting a profit of ₹22.5 crore in the March quarter.
SpiceJet, India's fourth-largest airline by market share, had recorded a loss of ₹322 crore in the same quarter last year.
"These results indicate that a recovery is in progress, and is the first tangible evidence of the ongoing revival," Ajay Singh, chairman of the company, told NDTV Profit.
However, its revenues have almost halved to ₹786 crore in January-March quarter owing to a reduction in its fleet and a cut in its schedules. The market share of SpiceJet also plunged to 9.4% in the same quarter compared to 18.1% in the corresponding quarter a year ago.
"Results a surprise. Lot more needs to be done to emerge as a consistently profitable airline though efforts and focus is visible. Positive Q4 results will, no doubt, assist in fund raising, including debt," Kapil Kaul, CEO of Centre for Asia Pacific Aviation in India, told The Economic Times.
The struggling carrier was on the verge of collapse before an ownership change in January this year. The company's board decided to transfer control of SpiceJet from the Marans to founder-promoter Ajay Singh, after whcih Singh acquired the entire 58.4% stake held by the Maran family.
The move was welcomed by many industry watchers, as it was expected to infuse new lease of life into the struggling airline.
Under the restructuring plan, Singh is expected to infuse ₹1,500 crore to turnaround the loss-making airline. SpiceJet has already received ₹650 crore under the new revival plan.
"A major chunk of the funds have gone into clearing the dues of various vendors, government taxes and lessor companies. A part of it has also been utilised in repayment of some of the banks dues," said chief financial officer Kiran Koteshwar.
Reacting to the positive development, stock price of SpiceJet went up by almost 12% on Friday touching intra-day high of ₹21.30 on the Bombay Stock Exchange (BSE).
The low-cost airline currently operates 20 Boeing 737s and 15 Bombardier Q400 turbo prop planes. Starting in May 2005, the company has completed 10 years of its existence in the airline industry.