NEW DELHI: SpiceJet, the embattled low-cost airline, has recently taken significant steps to resolve ongoing financial disputes that have threatened its operations. On Tuesday, the airline announced the settlement of a $23.39 million dispute with Aircastle (Ireland) Designated Activity Company and Wilmington Trust SP Services (Dublin) Ltd for a considerably reduced amount of $5 million.
The negotiation also includes agreements regarding the treatment of specific aircraft engines, signaling a potential thaw in tensions between the parties involved. SpiceJet made it clear that all current litigations and disputes related to this settlement would be withdrawn at the appropriate forums, marking a strategic move toward stabilising its legal standing.
This recent agreement comes on the heels of another successful settlement where SpiceJet resolved a $131.85 million dispute with Horizon Aviation 1 Ltd., Horizon II Aviation 3 Ltd, and Horizon III Aviation 2 Ltd. (under the management of Babcock & Brown Aircraft Management) for $22.5 million.
Moreover, the airline had previously navigated a financial disagreement with Engine Lease Finance Corporation (ELFC), which initially claimed $16.7 million. The specific terms of this latter settlement remain undisclosed, but it underscores the airline’s efforts to address its financial liabilities and improve its business viability.
Regaining stakeholder confidence
Ajay Singh, the Chairman and Managing Director of SpiceJet, expressed satisfaction with the resolution of the disputes, emphasising the airline’s commitment to amicably settling issues in the best interests of the company and its stakeholders.
The sentiment reflects a broader strategy aimed at regaining stakeholder confidence amid SpiceJet’s ongoing financial turmoil.
Complicating matters, however, is a new insolvency case filed by aircraft lessor Aviator ML 29641 Ltd concerning unpaid rental dues of approximately Rs 58 crore related to a lease agreement for a Boeing 737 aircraft.
The case has been admitted by the National Company Law Tribunal (NCLT), which has allowed SpiceJet time to respond, with a hearing scheduled for November 11.
The accumulation of such insolvency petitions against SpiceJet highlights the airline’s precarious financial situation, primarily attributed to unpaid dues to various vendors and lessors. The airline’s challenges have further resulted in court orders mandating the grounding of leased engines and aircraft, exacerbating the operational difficulties faced by the airline.
