SpiceJet Settles $16.7 Million Dispute with ELFC

SpiceJet, the Indian low-cost carrier, has reached a settlement with Engine Lease Finance Corporation (ELFC) to resolve a $16.7 million dispute. The announcement, made on September 24, 2024, confirmed that both parties had agreed on an undisclosed settlement amount, which is lower than the original claim.

In a regulatory filing, SpiceJet stated, “This settlement marks a significant step in SpiceJet’s ongoing efforts to streamline its operations and focus on future growth.” The dispute revolved around non-payment for eight engines leased from ELFC, which included interest and rental fees.

As part of the resolution, representatives from both companies will formalize the settlement agreement, aiming to withdraw all ongoing litigation and resolve any outstanding disputes. Ajay Singh, Chairman and Managing Director of SpiceJet, emphasized that the resolution not only addresses past issues but also enhances the airline’s position as it prepares for its next phase of growth and expansion.

The timing of this settlement is particularly noteworthy, as it comes just days after SpiceJet announced it had raised Rs 3,000 crore (approximately $360 million) through its Qualified Institutional Placement (QIP). Following this funding, Singh expressed optimism about the airline’s future, stating that SpiceJet has “all the infrastructure ready to become a 100-strong fleet again.”

Singh highlighted that the airline has secured airport slots, international traffic rights, and has sufficient pilots and crew in place, along with the necessary maintenance infrastructure. These developments indicate SpiceJet’s commitment to revitalizing its operations and expanding its fleet.

Despite the positive momentum from the settlement and recent funding, SpiceJet still faces unresolved claims from other parties, including Aircastle and Alterna Aircraft. As the airline navigates these challenges, the resolution with ELFC is expected to provide a much-needed boost in its efforts to stabilize and grow in the competitive aviation market.

Overall, this settlement marks a pivotal moment for SpiceJet, as it seeks to enhance its operational efficiency and position itself for future opportunities in the aviation sector. The airline’s proactive steps in addressing its financial disputes demonstrate a commitment to overcoming past challenges and focusing on sustainable growth.