Indian low-cost carrier SpiceJet is trying to make
financial amends with its lessors and has recently settled disputes worth more
than $40 million. The airline has
received fresh funding from investors and is taking some significant business
decisions to grow its operations
SpiceJet has agreed to settlement terms
with aircraft leasing firm Cross Ocean Partners and resolved a dispute worth
$11.2 million. Both parties jointly made
this announcement outside of the Delhi High Court amid a current execution
petition being pursued by Cross Ocean.
This will
be a huge relief for the airline, resulting in significant savings and also the
transfer of airframe and an engine at no additional cost. SpiceJet needs more aircraft capacity as it looks to cast a wider net
in India and overseas. Ajay Singh, Chairman and Managing Director,
SpiceJet, commented: “This settlement
reinforces our commitment to effectively settle with our partners and
strengthen our operational capabilities. We remain focused on sustaining the
positive momentum and creating long-term value for our stakeholders.”
Last
month, SpiceJet settled an even bigger amount with Celestial Aviation, a
subsidiary of AerCap. The airline and the lessor came to a mutual settlement of
their $29.9 million dispute through amicable negotiations and avoided
litigation.
Both these
developments come after the airline secured over $108 million in funding in
recent months, part of which it is now using to settle financial disputes with
lenders.
Disputes
such as these are not new to SpiceJet. The airline’s finances took a severe hit
during the COVID pandemic, and it has been dragged to the courts several times
by its aircraft and engine lessors for non-payment of dues.
SpiceJet
has also struggled to maintain capacity and market share in recent years,
with several of its planes getting grounded for various reasons. But with fresh funding, the budget
carrier is looking to recover lost ground.
But there
have been other changes within the company as well. It was reported last month
that SpiceJet could fire as many as 1,400 employees amid a larger finance
optimization. It is believed that among
the reasons for the layoffs is the intent to retain the interests of its
investors.