In a major setback to SpiceJet, the Delhi High Court on Thursday directed the Directorate General of Civil Aviation (DGCA) to deregister six aircraft given on lease to the low-cost airline by two Irish firms, reports fe Bureau in New Delhi. While issuing the order, justice Rajiv Shakdher also said that the aviation regulator will decide in two weeks the Irish firms’ plea to export the planes, the majority of which are
Boeing 737 aircraft. The court’s ruling was in the context of non-payment of dues to the lessor.
The judgment comes at a time when the carrier has just managed to survive with Kalanithi Maran, whose family previously controlled the airline, selling their 58% stake to original co-founder Ajay Singh, who is trying to put in place a revival plan. If the airline is not able to enter into suitable arrangements with either new lessors or carriers for new aircraft, it could face a major crisis next
month onwards.
Currently, SpiceJet operates 32 aircraft — 17 Boeing 737 and 15 Bombardier Q400s — and it has stated earlier that in the summer schedule it would increase its Boeing fleet to 27. On the contrary, with the current deregistration its strength falls by six.
Further, another bench of the HC has reserved its order on a plea by another Irish firm to deregister another five aircraft.
SpiceJet’s revival plan hinges on its ability to increase its Boeings to around 27 in the next couple of months because under the advance booking window it has booked tickets till October. Inability to have the aircraft could see it resorting to cancellations and refunds, which would render it a big blow at a time it is trying to recover lost ground.
The carrier placed orders for 42 Boeing 737 planes last March but the delivery would begin from 2016 onwards. Meanwhile, analysts say, SpiceJet would have to look to leasing aircraft from a new lessor or from a foreign airline.
Following the change of guard, SpiceJet is understood to have paid Rs 60 crore this month of about Rs 700 crore it owes to lessors.
Thursday’s judgment came on the pleas of AWAS Ireland and Wilmington Trust SP Services (Dublin).
Reacting to the high court ruling, SpiceJet said it’s next course of action would be only after evaluating the order. The airline also said it was negotiating with the lessors for a mutual settlement to the case. “We are studying the order, if so advised we will take matter to the higher judicial forum. Dialogues are on to settle the dispute amicably,” a SpiceJet spokesperson said in a statement.