A day after the Delhi High Court’s blow to no-frills carrier SpiceJet by directing the Directorate General of Civil Aviation (DGCA) to deregister six aircraft given on lease to it by two Irish firms, the company exuded confidence of resolving the issue with the lessors and stated that its summer schedule with an expanded fleet will not be affected.
The airline has drawn up a two-pronged strategy, of appealing against the HC’s order while negotiating with the lessors to resolve the issues. It said non-payment is a legacy issue but as the company has since changed hands and the new owners have settled dues and are working on settling the remaining issues, there would be no disruption of operations.
“SpiceJet has in fact reached an in-principle understanding with one of the two lessors already, and is in advanced discussions with the other lessor. Meanwhile, SpiceJet is exploring all legal remedies to safeguard its interest to maintain continuity of operations. SpiceJet would like to assure its partners and customers that the situation of the airline is very different from what it was in late 2014, and that it has received its first tranche of funding already and is in the process of paying off creditors in a phased manner,” the airline said in a statement.
“All taxes have been paid, all salaries are current, and several lessors who supported the airline during the crisis have already been paid off in full while payment plan discussions are actively ongoing with remaining lessors,” it added.
The development is significant since any signal in the market that SpiceJet’s expanded fleet operations from next month is in jeopardy could derail its entire revival plan.
On Thursday, after the HC’s order came, analysts had said that 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. This was because currently SpiceJet operates 32 aircraft — 17 Boeing 737s and 15 Bombardier Q400s — and it has stated earlier that in the summer schedule it would increase its Boeing fleet to 27.
However, with the deregistration its strength would falls by six. Another threat looms in the form of another bench of the HC having reserved its order on a plea by another Irish firm for deregistration of five more aircraft.
SpiceJet’s revival plan is tied with 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 be a major blow at a time it is trying to recover lost ground.
The carrier placed order for 42 Boeing 737 last year in March but delivery would begin from 2016 onwards.
Responding to such apprehensions, the company said on Friday that is operations are normal, on-time performance is now among the top two in the country, and confidence in the market is high.
“The change of ownership and infusion of fresh funding has assured SpiceJet’s future, and our creditors are aware and appreciative that the best outcome for all parties would be a fully revived and healthy SpiceJet, and are working jointly towards that outcome,” it said..
As part of the revival plan, the company said that it is also in the process of adding more aircraft to the fleet and expects to add eight or nine Boeings starting April to take the active Boeing fleet to 25-26 aircraft in the summer, in addition to the 15 Q400 aircraft owned by it. “SpiceJet will continue to add more aircraft in the second half of the year to take the Boeing fleet up to 34-35 aircraft by the end of the year,” it added.