SpiceJet settles $131.85 million dispute with 3 lessors; pays off $22.5 million

SpiceJet has another good news for its investors, stakeholders, employees as well as passengers. The airline has managed to settle a dispute valued at $131.85 million (Rs 1,108 crore) with three lessors under Babcock & Brown Aircraft Management (BBAM)'s management: Horizon Aviation 1 Ltd, Horizon II Aviation 3 Ltd, and Horizon III Aviation 2 Ltd for $22.5 million.

On this backdrop SpiceJet's share prices surged by 6% higher at Rs 66.70 per share at 12:15 pm

The dispute settlement comes almost a month after SpiceJet management managed to raised Rs 3,000 crore through a QIP. This settlement would help the airline to improve its financial stability and operational efficiency. 

Just-recently SpiceJet resolved a $16.7 million dispute with Engine Lease Finance Corporation (ELFC). 

Experts are of the opinion that both the above developments will most likely boost investor confidence in the airline as it navigates through tough financial crises to ensure a brighter future with solid financial backup.

"This landmark settlement with BBAM allows us to significantly reduce our liabilities and reinforces our efforts to emerge as a more robust airline. Together with the funds raised through our QIP, we are well-positioned to focus on growth, ungrounding our fleet, and expanding our services," said Ajay Singh, Chairman and Managing Director of SpiceJet.

Going ahead, SpiceJet is set to expand its fleet by adding ten aircraft by the end of November 2024. The first plane will be inducted on October 10, 2024 with further additions being made over the two months. 

Of these ten aircraft, seven will be acquired on lease while the airline will try and retrieve the three grounded aircraft. As of October 8, 2024 SpiceJet has only 19 operational aircraft while 36 planes are grounded.