SpiceJet Gets Extended Deadline for Engine Lease Payments

SpiceJet, an Indian airline, has been granted an extension until May 22 to settle a $1.58 million engine lease payment with lessors Team France and Sunbird France. This decision comes despite the airline’s failure to comply with a previous court directive from March 2024, which required it to fulfill its financial obligations within four weeks.

The recent court decision, presided over by Judge Prathiba Singh of the Delhi High Court on May 3, gave SpiceJet what the judge described as “one last chance” to avoid grounding orders for its aircraft. The lessors, which are special purpose vehicles (SPVs) operated by ST Engineering, assert that SpiceJet has not paid dues for several years and owes them approximately $10.84 million for three engines. These issues were discussed in prior court sessions, where the lessors demanded payments and sought injunctions to prevent the airline from using the disputed engines.

Despite a clear order on March 28 demanding payment within 28 days, the airline did not comply, leading to a stern warning from the judge on May 1 about potential grounding. By May 3, however, another agreement on the payment was established.

In addition to the engine lease issue, SpiceJet is involved in multiple legal battles, as recorded by the Delhi High Court. These include cases initiated by its former supporter Kalanithi Maran and his company KAL Airways, various tax claims by Delhi authorities, and attempts by different leasing companies like Genesis Aircraft Services and Cross Ocean Partners to enforce monetary judgments from the UK High Court due to lease agreement violations.

Moreover, entities such as Aircastle, Celestial Aviation, Raymach Technologies, and three DAE Capital SPVs are pushing for SpiceJet’s insolvency through India’s National Company Law Tribunal.

From January to February, SpiceJet managed to raise $127.9 million as part of a broader effort to secure $271.5 million to fortify its precarious financial situation. This included some settlements with creditors outside of court.

The dispute involving Sunbird France and Team France is set to continue in court on May 27.

References

• ” India’s SpiceJet given more time to pay engine lease SPVs” Ch-Aviation News. Read more