New Delhi: Budget carrier SpiceJet is facing a new insolvency case in the National Company Law Tribunal (NCLT), filed by aircraft lessor Aviator ML 29641 Ltd over unpaid rental dues of around ₹58 crore.
The National Company Law Tribunal (NCLT), which heard the plea on Monday, refused to issue the notice to SpiceJet, citing the absence of the airline’s response to the demand notice in the lessor’s petition. The tribunal gave it time to submit the reply regarding the demand notice, with the next hearing scheduled for 11 November.
According to the lessor’s plea, the default arose from a lease agreement dated 16 June, 2017, for a Boeing 737 aircraft. The petition stated that as of 29 June, 2024, the outstanding amount is approximately $7.3 million, equivalent to ₹58 crore.
The lessor’s counsel noted that while SpiceJet has attempted to negotiate a settlement, no resolution has been reached, prompting the insolvency filing.
This case adds to a growing list of insolvency actions against SpiceJet for unpaid dues to various vendors and aircraft lessors. To date, none of these cases have resulted in insolvency proceedings against the airline.
Some have been dismissed by the NCLT, while others have been withdrawn after settlements, with several still pending final decisions.
The parties filing various insolvency cases against SpiceJet include Wilmington Trust SP Services (Dublin), Willis Lease Finance, Celestial Aviation, Aircastle, and Alterna Aircraft. Additionally, three entities—AWAS 36698 Ireland, AWAS 36694 Ireland, and AWAS 36695—along with Shannon Engine Support Limited, Engine Lease Finance B.V., Raymach Technologies Pvt. Ltd., and software solutions startup Techjockey Infotech Pvt. Ltd. have also filed cases.
The NCLT rejected the pleas of Willis Lease Finance and Wilmington Trust SP, while SpiceJet settled with Celestial Aviation, Alterna Aircraft, and Raymach Technologies Pvt. Ltd. Engine Lease Finance B.V. has also settled its case. All of these parties have either withdrawn their cases against the airline or are in the process of doing so.
The pleas from Aircastle, AWAS 36698 Ireland, AWAS 36694 Ireland, and AWAS 36695 remain pending, as do those from Shannon Engine Support Limited and Techjockey Infotech Pvt. Ltd.
Wilmington Trust and Willis Lease Finance have approached the National Company Law Appellate Tribunal (NCLAT) to challenge the NCLT’s dismissal of their insolvency pleas.
Last week, SpiceJet announced a settlement with Irish aircraft lessor Babcock & Brown Aircraft Management, resolving a dispute worth $131.85 million. This follows the airline’s successful raise of ₹3,000 crore through a Qualified Institutional Placement (QIP), a critical step in its financial recovery.
Additionally, SpiceJet is set to receive ₹736 crore from a previous funding round, further bolstering its financial stability and growth prospects.
This new capital is vital for SpiceJet to address its financial challenges and settle obligations with various creditors, particularly lessors involved in ongoing litigations in the NCLT, Delhi high court, and the Supreme Court regarding unpaid dues. Recent court orders have mandated the grounding of leased engines and aircraft due to these unpaid dues, exacerbating the airline’s difficulties.
According to media reports, SpiceJet’s CMD Ajay Singh stated that the airline aims to expand its fleet to 100 aircraft by 2026. Singh indicated that SpiceJet plans to quickly return its 36 grounded aircraft to service, which are currently out of operation due to a lack of spare parts. By March 2025, the airline expects to have a fleet of 40 aircraft, equivalent to that of Akasa Air, with plans to add another 40 thereafter.
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