SpiceJet Settles Disputes Worth over $40 Million with 2 Lessors

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.