The Delhi High Court on Wednesday gave SpiceJet time till April 7 to settle dispute with Irish lessor AWAS Ireland. The decision brings relief for the low-cost airline, which has been trying to increase its fleet size for the summer schedule while settling disputes with lessors for non-payment of dues.
Last week, the Delhi High Court had asked the Directorate General of Civil Aviation to de-register six aircraft given on lease to SpiceJet by two Irish lessor firms. On Monday, the company had announced it has reached an out-of-court settlement with the one of the lessors, Wilmington Trust SP Services (Dublin), which had leased three Boeing A-737s.
The HC relief comes at a time, when the company was faceing trial in the Madras High Court with another five lessors for non-payment of dues, on Wednesday. The amount is to the tune of R100 crore. The five companies are Steddell Limited, Torodell Limited, B&B Air Acquisition, Virgodell Limited and Xavierdell.
The companies ended lease with SpiceJet in December, the same month when Ajay Singh, one of the original co-founders of SpiceJet bought 58% stake in the airlines from Kalanithi Maran and his family to turnaround the company’s fortunes.
Singh has agreed to pump in R1,500 crore to revive the beleaguered airline of which R500 crore has already been invested.
The airline had announced in February that it will increase its fleet to 27 Boeing aircraft in April and 34 by the end of 2015. But with the legal battle and termination from lessors, SpiceJet could face a tough time getting new lessors. If the new planes don’t come in soon, the fleet size will fall to 11 Boeings, and another 15 Bombardier Q400s, disrupting SpiceJet’s revival strategy. The airline announced last week that it is already in talks with new lessors and one lessor has in-principle agreed to lease three Boeings.