SpiceJet Ltd Management Discussions

Global Economy

The global economy demonstrated resilience amidst persistent macroeconomic pressures and geopolitical uncertainty during the year under review. The conflict in Ukraine and ongoing disruptions in the Red Sea continued to strain international supply chains, while trade disputes between major economies posed additional external challenges.

According to the International Monetary Funds World Economic Outlook, global GDP growth reached 3.3% for the year. This growth was not uniform, with a noticeable slowdown in advanced economies, contrasted by a more consistent expansion across many developing regions, particularly in Asia.

The global economy is expected to uphold a steady growth trajectory, with projections indicating expansion of 2.8% in 2025 and 3.0% in 2026. This outlook reflects a generally favourable environment supported by ongoing progress in major advanced economies as well as key emerging markets.

Growth prospects for the United States are forecast at 1.8% for 2025 and 1.7% in 2026. These figures take into account anticipated changes in the labour market and a possible slowdown in consumer expenditure as policy and market conditions evolve.

(Source: World Economic Outlook, IMF)

Indian Economy

Indias economy showed steady expansion and resilience, maintaining its position as a leading global economy with strong growth momentum in FY 2024-25. According to the Second Advanced Estimate (SAE), Indias real GDP growth stood at 6.5%, a moderation from the 9.2% recorded in the First Revised Estimates for FY 2023-24. This consistent performance underscores the nations solid economic foundation, supported by effective policy measures, a vibrant services sector and robust domestic consumption, all of which contribute to a positive long-term economic outlook.

Indias economic profile continues to strengthen, with the country now ranking as the worlds fourth-largest economy by nominal GDP and third-largest by purchasing power parity (PPP). Ambitious national goals have been set to achieve a $5 trillion economy by FY 2027?€“28 and $30 trillion by 2047. Achieving these targets will depend on continued government reforms, ongoing infrastructure development and broader technological adoption. This approach is reflected in the FY 2025?€“26 Budget, which increases capital expenditure to Rs.11.21 lakh crore, accounting for 3.1% of GDP.

Major policy initiatives and increased investment in both physical and digital infrastructure are central to Indias accelerated growth and economic self-reliance. Key programmes such as the Make in India initiative and the Production-Linked Incentive (PLI) scheme have provided significant impetus to this progress.

(Source: Press Information Bureau, World Economic Outlook, IMF, PIB)

According to the Reserve Bank of India, Indias economy is projected to expand by 6.5% in FY 2025-26. It is forecasted that by 2030, the country will become the worlds third-largest economy, supported by investment in infrastructure, higher private sector capital spending and growth in financial services. Ongoing reforms are expected to help sustain this progress over the longer term. investment, particularly in roads and railways, aims to enhance connectivity and support job creation. The budget also reinforces the PLI scheme in fields such as electronics and textiles, while continuing to endorse the Make in India vision for strengthening the countrys presence in global manufacturing.

Key initiatives such as Make in India 2.0, ongoing measures to improve the business environment and the Production-Linked Incentive (PLI) scheme are focussed on strengthening infrastructure, manufacturing and exports, positioning India as a key player in global manufacturing. Inflation is expected to align with targets by the end of 2025, which could enable a more supportive monetary policy. Capital formation is likely to benefit from infrastructure projects and government support, while rural demand is anticipated to rise due to schemes like the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

The Union Budget 2025?€“26 adopts a strategy designed to foster both immediate and long-term growth. By prioritising infrastructure, boosting domestic manufacturing and increasing disposable income, the budget is intended to sustain economic expansion while maintaining fiscal prudence. A notable provision is the raised income tax exemption limit to Rs. 12.75 lakh per year, which is set to improve disposable income for middle-class households and encourage greater consumer spending. Substantial infrastructure

(Source: Press Information Bureau, RBI)

Industrial Overview

Indian Aviation Industry

The Indian aviation industry is one of the fastest-growing sectors globally and is poised for significant expansion in the coming years. India is the third-largest aviation market in terms of passenger volume. This growth is supported by a rising working population, a widening middle-class demographic and an increase in disposable incomes, which together drive rising demand for air travel.

International Domestic

Growth-International Growth-Domestic

Source- DGCA

Current estimates indicate that India requires over 2,200 aircraft by 2042 to support its expanding aviation landscape. This demand surge reflects the under-penetration of air travel in the country compared to its population size and economic potential, highlighting vast room for growth.

The Maintenance, Repair and Overhaul (MRO) sector presents a substantial opportunity, forecasted to grow from $800 million in 2018 to over $2.4 billion by 2028. Revenues for domestic MRO service providers are projected to triple by FY 2027-28. Government initiatives, including tax benefits like a uniform 5% IGST on aircraft parts and extended export and re-import periods, are set to further catalyse this segments development.

Policy support remains strong, with the current Foreign Direct Investment (FDI) policy permitting 100% FDI in scheduled air transport services for Non-Resident Indians (under the automatic route) and up to 49% for others. This policy framework continues to encourage foreign investments and partnerships.

Investment in airport infrastructure continues apace, with six international airports completed under public-private partnerships (PPP). The Indian aviation sector is expected to attract investments worth approximately $25 billion by 2027. Notably, major industrial groups, are committing significant capital towards power projects and infrastructure development linked to aviation hubs.

(Source: IBEF )

Air Passenger Traffic

During FY 2024-25, the Indian aviation sector handled a total of approximately 411.76 million passengers, encompassing both domestic and international traffic. The sectors growth trajectory has been strong since the turn of the millennium, propelled by rising incomes and the proliferation of low-cost aviation offerings.

Indias airport infrastructure has garnered global recognition, exemplified by Delhis Indira Gandhi International Airport securing the 10 th position among the worlds busiest airports by passenger traffic, as per Airports Council International.

By 2036, projections suggest that India will host 480 million flyers, a figure exceeding the combined passenger volumes of Japan (just under 225 million) and Germany (just over 200 million). According to the International Air Transport Association (IATA), India is expected to overtake both China and United States to become the worlds third-largest air passenger market within the next decade.

Between FY 2016 and 2024, domestic and international passenger traffic grew at a CAGR of 6.86% and 2.72% respectively. In FY 2023-24 alone, domestic passenger traffic increased to 306.79 million, reflecting a 13.5% year-on-year rise, while international passenger traffic grew 22.3% to reach 69.64 million passengers compared to FY 2023.

(Source: IBEF )

International Domestic

Growth-International Growth-Domestic

Cargo Traffic

Between FY 2016 and 2024, cargo traffic at Indian airports grew at a compound annual growth rate (CAGR) of 2.80%, rising from 2.70 million metric tonnes (MMT) to 3.71 MMT. In FY 2024?€“25, total freight traffic, encompassing both domestic and international segments, stood at approximately 3.71 MMT.

Freight Traffic (million metric tonnes

International and Domestic Freight Traffic

The growth in freight volumes mirrors the expanding import and export activities of the country, with airways accounting for around 30% of Indias total trade. Domestic freight traffic increased at a CAGR of 3% from FY 2016 to FY 2024, reaching 1.32 MMT in FY 2024 and further growing to approximately 1.394 MMT in FY 2025. Similarly, international freight traffic registered a CAGR of 2.7% over the same period, with volumes rising from 2.04 MMT in FY 2024 to about 2.325 MMT in FY 2025.

Looking ahead, airport freight traffic in India shows promising growth potential, with expectations to reach 17 MMT by FY 2040, driven primarily by rising trade volumes and increasing logistics demand.

Noteworthy developments in the cargo segment include the Government of Indias approval, received on February 7, 2023, permitting Delhi International Airport Limited (DIAL) to function as a transhipment hub for cargo between Bangladesh and global destinations. This strategic move, first operationalised in March 2023 with the initial batch of transhipment cargo from Bangladesh, is anticipated to provide faster and cost-efficient routes for export cargo, thereby boosting Indias position in the global logistics network.

(Source: IBEF )

Government Initiatives

The Indian government continues to drive the growth of civil aviation through major infrastructure projects and regional connectivity schemes. In August 2024, the Cabinet approved a Rs.1,549 crore ($185.69 million) investment to develop a new Civil Enclave at Bagdogra Airport, featuring a 70,390 sqm terminal with a peak capacity of 3,000 passengers per hour and an annual capacity of 10 million passengers, incorporating green building practices.

In January 2024, the Union Minister for Civil Aviation inaugurated Wings India 2024, marking the launch of UDAN 5.3, which has developed 76 airports, operationalised 519 routes and benefited over 13 million passengers by incentivising regional connectivity.

Indias civil aviation expansion is being drien by the National Infrastructure Pipeline, which envisages more thn Rs.91,000 Crore of airport development CAPEX between FY 2019-20 and FY 2024-25, with Rs.25,000 Crore from the Airports Authority of India and the rest under the PPP mode By December 2024, about Rs.84,300 crore had already been spent. Operationally, the sector saw its Scheduled/Scheduled Commuter fleet rise from 771 to 834 aircraft during CY 2024, while 119 Non Scheduled operators deployed 427 Aircraft and 13 new Air Operator Permits were issued, reflecting continued momentum.

Company Overview

SpiceJet Limited is a leading Indian low-cost airline, recognised for its commitment to providing affordable, efficient and customer-centric air travel services across India and internationally. Since its inception, SpiceJet has positioned itself as a key player within the competitive aviation sector, especially in the burgeoning domestic market.

The Company operates a diversified fleet with a focus on modern, fuel-efficient aircraft, enabling it to balance cost optimisation with passenger comfort and safety. Through continuous innovation in its services and operational efficiency, SpiceJet has enhanced its connectivity by serving key metropolitan, tier-2 and emerging city markets, providing crucial air connectivity and promoting regional economic development.

With nearly two decades of experience in the aviation industry, the Company has earned a reputation for delivering accessible and comfortable air travel without compromising value. The airline continues to broaden its footprint by expanding its route network and augmenting its fleet with a focus on modern, efficient aircraft. Alongside passenger services, SpiceJet offers specialised cargo and logistics solutions through its wholly-owned subsidiary, SpiceXpress, which has established a significant presence within Indias cargo sector since its launch in 2018.

SpiceJets fleet is diversified, comprising a blend of large, medium and smaller aircraft types such as Boeing 737-8 MAX, Boeing 737-800 and Q400 turboprops, enabling the Company to flexibly serve a variety of routes and customer needs. The airline commands a notable market position, flying to 35 domestic cities and two international locations, thus playing a vital role in supporting Indias expanding aviation landscape.

SpiceJets strategy is to deliver outstanding value by combining cost-effective pricing with reliable on-time performance, fostering strong customer loyalty. The airline employs a balanced network strategy, integrating high-demand scheduled routes with flexible charter and cargo services for a diversified revenue stream. The company leverages technology to enhance the customer experience, from seamless digital booking to agile operational management, while also prioritising sustainability through ongoing initiatives aimed at reducing its carbon footprint.

Operational and Developmental Overview ?€“ Brand Consolidation

Network Growth & Regional Connectivity

?€? 32 new flights launched in FY 2024-25 with 24 new domestic flights in Summer 2025, expanding to new destinations such as Tuticorin, Porbandar, Dehradun, Shivamogga, Prayagraj and Phuket.

?€? Introduced new routes including Ahmedabad-Srinagar, Pune-Varanasi, Bengaluru-Goa and Pune-Chennai.

?€? Operated special daily flights to Prayagraj from Delhi, Mumbai, Bengaluru and Ahmedabad during the Maha Kumbh Mela (Jan-Feb 2025).

Customer-Centric Innovations

?€? Introduced sign language training for cabin crew to better serve passengers who are speech and hearing impaired, reflecting our commitment to inclusivity.

?€? Recognised as No. 1 in grievance redressal, responding to customer concerns within 24 hours, setting a new industry benchmark.

Operational Excellence & Safety

?€? Renewed prestigious IATA Operational Safety

Audit (IOSA) certification in March 2025.

Leadership Recognition

?€? A proud moment as our Chairman & MD, Ajay Singh, became the first recipient of the FILA Icon of Excellence Award.

?€? Honoured as a visionary leader who has redefined turnarounds, not once but twice, at Delhi Transport Corporation, Doordarshan and SpiceJet.

?€? Rightly celebrated as the "Phoenix Man of

Indian Aviation".

Sustainability & Energy Efficiency

?€? On National Energy Conservation Day 2024, SpiceJet was honoured for its outstanding contribution to energy conservation.

?€? The award was presented in the presence of Honble Vice President of India Shri Jagdeep Dhankhar, reaffirming our commitment to a greener, energy-efficient future.

Digital Innovation ?€“ Passenger Reconciliation System (PRS)

?€? The Passenger Reconciliation System (PRS) is an in-house digital initiative developed by SpiceJet to validate passengers in real time by scanning boarding passes at the ladder point and recording accurate timestamps of entry.

?€? It also tracks crew entry and exits electronically, eliminating manual registers.

This solution ensures faster, error-free boarding, enhances safety by digitally accounting for every passenger and crew member, reduces manual effort and showcases SpiceJets strength in building effective in-house innovations that elevate safety, security and passenger experience.

Key Financial Ratios

Particulars	FY 2024- 25	FY 2023- 24	Explanation
Debtors Turnover Ratio	26.75	40.77	The trade receivables turnover ratio decreased by 34% due to a 25% decline in revenue from operations, mainly from advance-based customers, while credit sales to regular customers continued, resulting in higher year end receivables.
	4.10	7.13	Change in ratio is mainly on account of increase in inventory by 5% and decline in purchase by 35%.
Interest Coverage Ratio	2.64	3.48	Change in ratio is less than 25% as compared to previous year and hence, no explanation required.
Current Ratio	0.41	0.28	Change in ratio is mainly on account of 27% decline in current liabilities on account of statutory dues payment, debt and lessor settlements entered by the Company during the year.
Debt Equity Ratio	6.17	(2.08)	The decrease in ratio is on account of decrease in non-current borrowing and increase in total equity due to increasing operational profits derived from improvement in Companys financial health and increase in securities premium reserve and equity share capital due to QIP.
Operating Profit Margin	21%	23%	Change in ratio is in line with movement in operations
Net Profit Margin	1.1%	(5.81%)	Change in ratio is due to over all profit during the year.
Return on Net Worth	8.50%	(15.83%)	Significant improvement in return on Net worth due to improved operational profit and positive Net worth at the end of the current year

Segment-wise Performance

Rs. in millions

Particulars	FY 2024- 25	FY 2023- 24
Segment Revenue
Air transport services	51,364.22	67,591.86
Freighter and logistics services	1,869.41	3,248.32
Others	23.28	12.88
Total	53,256.91	70,853.06
Segment Results
Air transport services	580.74	(4,094.39)
Freighter and logistics services	101.33	(16.02)
Others	(62.75)	(126.74)
Profit/(Loss) before exceptional items	619.32	(4,237.15)
Segment Assets
Air transport services	62,992.99	61,668.79
Freighter and logistics services	1,824.84	2,128.04
Others	1,127.16	924.88
Total Assets	65,944.99	64,721.71
Segment Liabilities
Air transport services	81,947.08	1,12,884.29
Freighter and logistics services	2,025.50	1,965.23
Others	1,416.35	2,057.94
Total liabilities	85,388.93	1,16,907.46

Opportunities, Risks, Concerns and Threats

The Indian aviation sector is on a rapid growth trajectory, underpinned by increasing demand for air travel driven by rising incomes and aspirations of the young population. Both business and leisure travel frequencies continue to surge, supported by an expanding domestic and international tourism landscape. Furthermore, government initiatives to improve airport infrastructure are creating a strong foundation for sustained industry growth.

Significant untapped potential remains due to the current under-penetration of aviation services in India. This presents SpiceJet with abundant prospects to expand its network by connecting previously underserved destinations and by establishing international alliances that can extend its global footprint and attract a wider customer base.

Nevertheless, the sector faces pressing challenges. Fluctuating fuel prices and a depreciating domestic currency exert pressure on profitability. Economic slowdowns may curtail discretionary spending, negatively impacting passenger volumes. The industrys competitive and capital-intensive nature also leaves it vulnerable to external disturbances, including oil price shocks, exchange rate volatility, epidemics, geopolitical tensions and equipment disruptions, all of which pose material risks to operational continuity and viability.

Securing a dependable supply of fuel-efficient aircraft, engine and component remain critical to support long-term growth ambitions. In addition, intensified competitive actions, such as aggressive marketing campaigns or enhanced services offered at lower prices by rivals, could erode SpiceJets market share.

An emerging regulatory challenge is compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), designed to reduce emissions from international flights. As India is a member state of the International Civil Aviation Organisation (ICAO), it is mandated to meet the offsetting requirements and will be required to adhere to the mandatory phase of CORSIA starting in 2027.

Human Resources

Human Resources plays a pivotal role in supporting business growth, ensuring compliance and fostering a "people-first" culture. Our key focus remains on aligning people practices with the companys broader goals while maintaining transparency and fairness.

The year was marked by stable industrial relations and priority areas included employee well-being, workplace safety, work-life balance and discipline. We also focussed on automating over processes, enhancing the performance management system and concentrating on initiatives for employee engagement, recruitment and retention. This was done to build an agile and compliant workforce capable of supporting the companys operational expansion.

As of March 2025, the total headcount was 6,484 which include 4,894 permanent employees. The Company remains committed to nurturing talent and reinforcing a culture of trust, performance and inclusivity.

Business Outlook

SpiceJet has successfully navigated a challenging yet opportunity-rich aviation environment, emerging with a strengthened financial position and a clear path for growth. The Company has achieved a significant milestone, posting its highest-ever quarterly profit in Q4 FY25 and returning to a full-fiscal profit for the first time in seven years. This remarkable turnaround is a testament to our relentless focus on financial and operational discipline, which has also enabled the resolution of multiple legacy disputes with lessors and other partners, resulting in substantial savings.

A key strategic priority for the year has been the reactivation and enhancement of our fleet. We are actively working to un-ground a number of our aircraft, including Boeing 737 MAX planes and have secured agreements with leading global MROs and OEMs to expedite this process. Since October 2024, we have added 10 aircraft to our fleet, comprising both previously grounded planes and newly leased ones, which has allowed us to significantly expand our network with over 60 new flights.

The success of our Qualified Institutional Placement (QIP), which raised Rs.3,000 crore, has been instrumental in strengthening our balance sheet, clearing statutory dues and accelerating our fleet expansion and operational growth plans. This capital infusion, combined with the successful settlement of key disputes, has restored investor trust and set the stage for sustained recovery.

Beyond our financial and operational achievements, we remain dedicated to enhancing the customer experience and driving digital innovation. Our new initiatives, such as the introduction of paperless boarding via WhatsApp, aim to offer a more seamless and eco- conscious travel experience for our passengers. With a renewed focus on network expansion, fleet optimisation and a strong financial foundation, SpiceJet is well-positioned to capitalise on the robust growth of the Indian aviation market.

Risk Management

The Company maintains a comprehensive risk management framework to identify, assess and mitigate potential risks that could affect its strategic objectives. This framework is overseen by the Board of Directors and its committees, with day-to-day management handled by the Companys leadership.

The principal risks are categorised as follows:

?€? Strategic Risks: The Companys ability to adapt to changes in the market, including shifts in consumer preferences, technological advancements and competitive dynamics.

?€? Operational Risks: Disruptions to core business operations, such as supply chain issues, system failures, or human error.

?€? Financial Risks: Potential impacts on financial health due to foreign exchange fluctuations, interest rate changes and credit risks.

?€? Compliance and Regulatory Risks: The risk of non-compliance with legal and regulatory requirements, which could lead to penalties and reputational damage.

The framework is continuously reviewed and updated to ensure it remains effective in a dynamic business environment.

Internal Controls

The Company has a strong internal control framework that is appropriate for the scale and complexity of its operations. This system is designed to manage operations effectively and plays a crucial role in safeguarding company assets, preventing and detecting fraud and errors and ensuring the accuracy of accounting records. It also helps in the timely preparation of reliable financial reports and ensures compliance with regulations.

An independent internal audit is regularly conducted to assess the effectiveness of these controls and ensure that company policies are followed. The scope of this audit is determined by an annual plan that is approved by the Audit Committee of the Board. The Audit Committee reviews the auditors reports and takes necessary actions to address any findings.

Information Technology

During the year, SpiceJet focussed on enhancing its technological infrastructure to boost efficiency and the customer experience. The company continued its transition to a public cloud, with approximately 70% of the migration now complete. This move aims to handle increasing data needs, improve flexibility and strengthen IT security.

Leveraging the power of large language models, the company has started developing automated AI solutions for customer support across its call centre, email and social media platforms. Additionally, an investment in a dedicated Customer Hub has enabled more personalised customer service and offerings.

Regarding data security, SpiceJet has become GDPR certified, proactively aligning itself with global data protection standards as Indian laws on the subject come into effect. The airline has also embraced initiatives for sustainability and convenience. It has enabled Digi Yatra at all available airports and, in a significant move towards paperless operations, piloted a paperless boarding process at Shillong airport. This innovative process allows boarding passes to be sent directly to customers phones via WhatsApp at check-in counters. SpiceJet estimates this initiative could save the airline industry from an estimated six tonnes of carbon emissions per month, given that over nine million paper boarding passes were being printed monthly in 2025.

SpiceJet believes these innovative technologies and products will provide a competitive edge while improving the safety and efficiency of its operations.

Cautionary Statement

The Management Discussion and Analysis includes statements that outline the Companys goals, forecasts, estimates and expectations, which may be considered "forward-looking statements" under applicable laws and regulations. These statements are based on informed judgements and estimates. The Companys past performance is not necessarily a predictor of future outcomes and actual results may vary significantly from those stated or implied. These forward-looking statements are subject to various risks and uncertainties, such as economic conditions impacting supply and demand, market price fluctuations both domestically and internationally, changes in government regulations and policies, tax laws, availability and costs of raw materials and other legal factors. The Company does not undertake any obligation to publicly update, amend, or revise any forward-looking statements in light of new developments, information, or events.