• SpiceJet has settled a $23.39 million dispute with Aircastle and Wilmington Trust for $5 million amid a new insolvency case.
  • This follows recent settlements with Horizon Aviation and Engine Lease Finance Corporation.
  • Despite financial challenges, SpiceJet plans to add ten aircraft to its fleet by November's end.
  • The airline's future depends on the outcome of the insolvency case and its financial management.

In a significant development, SpiceJet, the embattled Indian airline, announced on Tuesday that it has settled a $23.39 million dispute with Aircastle (Ireland) Designated Activity Company and Wilmington Trust SP Services (Dublin) Ltd for an aggregate sum of $5 million. This settlement comes as the airline faces a new insolvency case, with some disputes still unresolved. The settlement was reached in conjunction with an agreement regarding the treatment of certain aircraft engines. As part of the settlement, all ongoing litigations and disputes between the parties will be withdrawn at the appropriate forums, the aviation firm stated.

This is not the first time that SpiceJet has resolved a dispute with lessors. Just last week, the low-cost carrier settled a $131.85 million dispute with Horizon Aviation 1 Ltd., Horizon II Aviation 3 Ltd, and Horizon III Aviation 2 Ltd. (under the management of Babcock & Brown Aircraft Management) for $22.5 million. Furthermore, last month, the airline settled a dispute with Engine Lease Finance Corporation (ELFC), which initially claimed $16.7 million, for an undisclosed amount.

Ajay Singh, Chairman and Managing Director of SpiceJet, expressed satisfaction over the resolution of the dispute with Aircastle and Wilmington Trust. He stated, This settlement underscores our commitment to amicably resolving matters in the best interest of the company and all stakeholders.

SpiceJet's Ongoing Financial Challenges

However, the airline's financial woes are far from over. Aircraft lessor Aviator ML 29641 Ltd has filed a new insolvency case in the National Company Law Tribunal (NCLT) over unpaid rental dues totalling around Rs 58 crore. The case revolves around a lease agreement for a Boeing 737 aircraft signed on June 16, 2017. The NCLT has allowed SpiceJet time to file its response, scheduling the next hearing for November 11.

This latest case adds to a series of insolvency petitions against SpiceJet, primarily related to unpaid dues to various vendors and lessors. The airline's financial difficulties have led to court orders mandating the grounding of leased engines and aircraft due to unpaid dues. Despite these challenges, SpiceJet has been making efforts to expand its operations.

SpiceJet's Growth Prospects Amid Challenges

The airline is planning to add ten aircraft to its fleet by the end of November, with seven of those being leased. This suggests an effort to expand operations while managing costs. Additionally, the airline had previously raised Rs 3,000 crore via qualified institutional placements to address its financial and operational challenges.

The ability of SpiceJet to secure new aircraft despite these challenges suggests a push for growth. However, the outcome of the insolvency case and the company's overall financial management will significantly influence its future prospects. The settlements, such as the one with Aircastle and Wilmington Trust, demonstrate SpiceJet's efforts to resolve financial disputes and potentially improve its financial standing. However, the fresh insolvency case highlights the continued financial pressures the airline faces.