SpiceJet (SG, Delhi International) will appeal a Delhi High Court decision this week that upheld an earlier ruling ordering the return of three aircraft engines to lessors Team France 01 SAS and Sunbird France 02 SAS. ch-aviation understands the low-cost carrier will now take the matter to India's Supreme Court.
As previously reported in ch-aviation, the special purpose lease vehicles have been pursuing the carrier in the courts over arrears dating back several years. Last year, the court was told that SpiceJet had not paid its bills for two years and at the time owed USD12.9 million. Last month, after breaching new payment plans, a judge said it seemed the company was out of money.
"You’ve been repeatedly giving undertakings to the court," the judge told SpiceJet's legal counsel at the time. "If you’re not in a position to pay, then you should ground these engines. If the company alone is liable and it has no money, then perhaps your directors should provide personal guarantees."
In response, SpiceJet managing director and promoter Ajay Singh offered to pledge personal shares equivalent to USD2.5 million against the debt. The engine lessors later rejected this offer, with their counsel telling the court his clients did not want shares in a company "whose existence is shaky."
On September 11, upholding an earlier single-judge ruling ordering the return of the aircraft, a three-judge panel dismissed SpiceJet's appeal noting the airline's history of ignoring orders and agreements.
“The fact that the financial condition of SpiceJet is weak is evident from its conduct and the stand taken on its behalf in court," the September 11 judgement reads. "Team France and Sunbird France could well end up both without its engines or the monies due under the engine lease agreements. The repossession and export of subject engines upon a termination event occurring is a contractual right conferred upon Team France and Sunbird France under the engine leas agreements."
Per the Delhi High Court rulings, the airline is required to stop using the engines, which may result in the grounding of more aircraft. However, SpiceJet is appealing the matter to India's Supreme Court, with that court asking the High Court on September 12 to send a formal request for an urgent hearing. A SpiceJet spokesperson told ch-aviation this week's ruling would have no impact on operations and that the airline was "currently reviewing the court order." ch-aviation fleets data indicates just 22 of SpiceJet's 61-strong fleet are in service. Of that in-service number, five are wet-leased aircraft.
Earlier this week, ch-aviation noted that SpiceJet was looking to lease an additional ten B737 types before the Christmas/New Year peak and is also attempting to raise INR32.36 billion rupees (USD385 million) which, among other things, would be used to settle outstanding liabilities with a range of airframe and engine lessors.
