‘Settlement not good enough’, SpiceJet’s aircraft lessor Aircastle tells NCLT

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Aircastle, the Ireland-based charter company of SpiceJet Ltd, told the court that settlement talks over the outstanding dues had been inconclusive.

Aircastle previously sought to initiate bankruptcy proceedings against the airline for non-payment of lease rents and other dues.

The airline owes Aircastle about 50 crore ($6 million). SpiceJet has requested court time to respond to its bankruptcy application.

local challenges

The airline faced financial challenges due to consecutive quarterly losses and increased competition in the local market.

In an effort to raise funds, it announced the revival of 25 of its fixed fleet using its own capital and a $50 million line of credit from a government scheme.

The recent bankruptcy proceedings of rival airline Go First have raised concerns among international lessors who now expect a drawn-out legal battle to get their planes back from the country.

Consequently, SpiceJet lessors including SMBC Aviation have submitted several requests to the Indian aviation regulator to de-register their aircraft and take them out of the country due to outstanding fees.

Time until May 25th

SpiceJet has stated that it has no plans to follow a similar path and file for insolvency, expressing gratitude to its landlords for their continued support.

The National Company Law Tribunal (NCLT) has given SpiceJet until May 25 to respond to Aircastle’s petition. Aircastle confirmed that previous settlement talks with SpiceJet had been unsuccessful, and the airline’s offer was deemed insufficient.

Despite the challenges in the Indian aviation industry, SpiceJet confirms its determination to avoid bankruptcy and is focusing on its commercial operations.

However, on May 12, aircraft lessor GY Aviation Lease approached the Directorate General of Civil Aviation (DGCA) to cancel the registration of two more Boeing 737-8 aircraft belonging to SpiceJet.

Several other SpiceJet aircraft have already been grounded for various reasons, with many lessors seeking to de-register their aircraft.