SpiceJet (SG, Delhi International) faces further legal action over aircraft leases after lessor Aircastle filed an insolvency petition against it. The matter is listed for mention before the Delhi bench of the National Company Law Tribunal (NCLT) on May 8, 2023. The petition reportedly concerns unpaid leases for four B737-800s.
NCLT records reveal lawyers for Aircastle lodged the petition on April 28. The matter is listed as Aircastle (Ireland) Limited vs SpiceJet Limited (case no: C.P. (IB) - 266/2023). On May 4, Aircastle's lawyers successfully moved the application under s.9 of the Insolvency and Bankruptcy Code (IBC) 2016, which gives the debtor ten days from delivery of the notice or invoice to make payment or lodge a dispute under s.8(2) of the code. If neither occurs within the ten days, Aircastle can file an application to start the insolvency resolution process. ch-aviation has contacted Aircastle and SpiceJet for comment.
"The conversation with the airline did not go as planned. It hasn’t paid lease rentals, and both parties are unable to get on the same page, hence, the petition has been filed," The Hindu Business Line reports a source saying. According to ch-aviation fleets data, SpiceJet operates a fleet of 72 aircraft, including five B737-700s, three B737-700(BDSF)s, sixteen B737-8s, eighteen B737-800s, three B737-900ERs, and twenty seven DHC-8-Q400s. Thirty four of the 72 aircraft are parked for various reasons, and 52 of the 72 aircraft are at SpiceJet on operating leases.
A SpiceJet spokesperson told ch-aviation that all Aircastle aircraft have exited the fleet. "This development, in no manner affects our operations or operating fleet. We are confident of resolving the matter without court proceedings and we are in discussions with their senior leadership team for the same," the spokesperson said.
In March, ch-aviation reported that Aircastle had lodged an application with India's Directorate General of Civil Aviation (DGCA) to deregister two B737-800s leased to SpiceJet after talks about outstanding aircraft leases broke down. In 2022, a series of lessors, including Horizon Aviation, DAE Capital subsidiary AWAS, and Alterna Capital Partners all went to the DGCA to attempt to retrieve aircraft from SpiceJet over overdue and unpaid leases. Last month, it was also reported that Turkish Technic, the maintenance wing of Turkish Airlines (TK, Istanbul Airport), would sue SpiceJet over an outstanding USD14.5 million related to unreturned emergency aircraft parts.
Despite its legal woes, SpiceJet CEO Ajay Singh has said the airline is looking to grow, clean up its balance sheet, and acquire new aircraft. In February, Carlyle Aviation Partners took a 7.5% stake in the airline in a USD29.5 million deal. Earlier this week, after securing Emergency Credit Line Guarantee Scheme (ECLGS) funding, SpiceJet said it would move to reactivate 25 parked planes.
