Turbulence ahead for SpiceJet as lessors reject settlement plea

The troubles for low-cost airline SpiceJet seems to be mounting as the case of SpiceJet versus lessors in Delhi High Court is tiling towards the lessors' side. In the latest hearing the court questioned the airlines’ intentions on repayment of lessor’s dues. 

The airline owes Rs 20 crore payment to its engine lessors. 

The court further asked for a detailed response from SpiceJet as to why the airline’s engines should not be grounded due to non-payment of dues. 

As a solution to this the court suggested that directors of the airline should disclose their personal assets as they are personally held liable for the overdue payments. 

The court would allow the airline to use the engines for commercial purposes only under this condition. 

As a response to the above, SpiceJet has asked for an extension to clear all the dues till September 30, 2024. The airline also acknowledged the default made in the payments but argued that grounding the engines at this point would impact not just its revenue but also its fundraising efforts.  

Further to this, the lessors have rejected airline’s settlement proposal to clear the dues with equity. 

The lessors have claimed that the airline owes them Rs 50 crore. The next hearing on the case is on August 12, 2024.
 
In May 2024, an engine lessor had filed a fresh insolvency plea against SpiceJet over arrears for aircraft engine leasing, to which the airline had argued that the lessor's demand notice did not comply with the required format under the Insolvency and Bankruptcy Code (IBC). 

The airline, even back then, had asked for more time to respond.