In a significant legal development, the Delhi High Court has instructed SpiceJet, a prominent low-cost airline, to pay $4 million to settle dues with two engine lessors, Team France 01 SAS and Sunbird France 02 SAS. This directive comes after the lessors deemed a settlement offer from SpiceJet unsatisfactory, leading them to seek legal recourse. They have also requested the court to prevent SpiceJet from using three specific engines, following the termination of their lease agreements.
The court, while scheduling the next hearing for February 21, sternly cautioned SpiceJet that non-compliance might result in a directive to ground the engines in question. This legal tussle underscores the financial strains within the aviation sector, highlighting the critical nature of lease agreements and operational liabilities.
In response to its financial challenges, SpiceJet has been proactive in strengthening its financial footing. The airline recently announced the successful allotment of shares and warrants totaling Rs 744 crore, marking a significant step in its capital enhancement efforts. Additionally, the airline has availed Rs 160 crore through the Emergency Credit Line Guarantee Scheme (ECLGS), boasting a robust bank balance of Rs 900 crore.
SpiceJet’s Chairman and Managing Director, Ajay Singh, has reportedly taken a hands-on approach to managing the airline’s finances, insisting on stringent expenditure scrutiny and a strict performance mandate. This approach is part of a broader strategy to rejuvenate SpiceJet, with a focus on fleet modernization, operational efficiency, customer satisfaction, and stringent cost management.
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The airline anticipates further capital infusion in upcoming financing rounds, aiming to solidify its market position and operational capabilities. Amidst these financial maneuvers, SpiceJet is also navigating ongoing legal proceedings with its engine lessors. A previous court directive required SpiceJet to make a payment of $450,000, which the airline complied with. However, the lessors have pursued additional settlements due to an outstanding balance of $12.9 million, accumulated over two years.
In a related legal matter, the court has permitted Engine Lease Finance BV, another SpiceJet lessor, to inspect an engine leased to the airline. This permission was granted amidst allegations of unauthorized use and component removal from the leased engine by SpiceJet.
