SpiceJet just settled a ₹60cr payment dispute with aircraft lessor
What's the story
SpiceJet has settled a payment dispute of around ₹60 crore with aircraft lessor Aviator ML. The airline informed the National Company Law Tribunal (NCLT) about the settlement and said that the first installment has already been paid. However, other lessors have opposed this settlement, claiming it is a "malafide" attempt by SpiceJet to block eight insolvency petitions against it.
Legal proceedings
Tribunal reprimands SpiceJet
The NCLT has deferred its judgment in a batch of eight insolvency petitions against SpiceJet, after other lessors opposed the settlement.
The combined dues claimed by these lessors exceed ₹500 crore.
The tribunal reprimanded SpiceJet for disclosing the settlement when it was about to pronounce its final orders and noted that multiple opportunities had been given to the airline to settle these disputes.
Future proceedings
NCLT defers judgment in Aviator ML case to August 19
The NCLT has deferred its judgment in the Aviator ML case to August 19.
This is because the matter is linked to claims of other lessors, prompting the tribunal to defer its judgment in all cases.
The petitions were filed under the Insolvency and Bankruptcy Code (IBC), with lessors seeking initiation of insolvency proceedings against SpiceJet over alleged non-payment of dues.
Financial struggles
SpiceJet faces multiple insolvency petitions
The settlement with Aviator ML doesn't end SpiceJet's insolvency-related challenges.
The airline is facing fresh insolvency petitions from NGF Alpha, NGF Genesis, NGF Charlie, and NVS Brokerage.
These legal challenges come as SpiceJet continues to manage liquidity pressures and work on its financial obligations.
As of July 31, the airline had paid May salaries to junior/support staff while others were being released in phases without a specified timeline for completion.
Operational details
Airline's operational status and market share
SpiceJet is operating 85 daily flights against around 140 proposed under its summer schedule.
The airline has 14 operational aircraft, including three Airbus A320s on damp lease agreements.
Its domestic market share stood at 1.9% in June, down from January's 3.9%.
The company has been taking steps to improve its financial position through fundraising, leasing aircraft, and settling outstanding dues.