
The Delhi High Court has refused to interfere with the order directing SpiceJet to ground three aircraft engines for defaulting on payment to engine lessors.
The division bench ruling came after SpiceJet appealed to overturn a single-bench order from August 16, which directed the airline to ground three leased engines from French companies Team France 01 SAS and Sunbird France 02 SAS. The original order, issued on August 14, also required SpiceJet to return the engines within 15 days and facilitate their inspection.
SpiceJet argued that grounding these engines would effectively ground two of its planes, causing significant public inconvenience given its already limited fleet of 21 aircraft. This order followed the lessors' rejection of SpiceJet chairman Ajay Singh's offer to pledge his shares as collateral, citing concerns over the airline's financial stability.
The Delhi High Court had previously criticized SpiceJet for operating leased engines without paying rental dues, highlighting the airline's precarious financial situation and its inability to honor commitments. Justice Rajiv Shakdher expressed skepticism about SpiceJet's assurances to lessors, noting that if the airline had the financial means to fulfill its commitments, it wouldn't be defending itself in court.
In response, SpiceJet's counsel, Amit Sibal, argued that the airline is making efforts to meet its obligations, including a bona fide offer to secure payments with encumbered aircraft or shares listed on the stock exchange. SpiceJet committed to continuing weekly payments of $160,000 and monthly instalments of $1.2 million, backed by additional security.
SpiceJet is navigating a period of financial and legal challenges, which has led to a reduction in its operational fleet. The airline is currently operating with approximately 22 planes, a significantly lower number than its usual capacity.
In response to these challenges, the Directorate General of Civil Aviation (DGCA) had placed SpiceJet under enhanced surveillance, effective August 29. This increased oversight includes more frequent spot checks and night surveillance to guarantee the safety and security of the airline's operations.
Published: 11 Sept 2024, 11:37 am IST
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