India’s SpiceJet Ordered to Return Aircraft and Engines Following Court Ruling

The Delhi High Court has issued a directive to SpiceJet, a leading Indian low-cost carrier (LCC), to return two aircraft and three engines to lessor TWC Aviation Capital by the end of May. This decision stems from TWC’s previous legal victories in UK courts, with the Indian courts now enforcing those rulings.

In a ruling dated May 22, the Delhi High Court mandated the return of the aircraft and engines, along with all relevant technical records, to TWC by May 28, 2024. The court emphasized the necessity of compliance with the order.

The dispute revolves around a 2019 lease agreement for two Boeing 737-800 aircraft, leased at a monthly rate of USD180,000 per aircraft. Despite assurances from SpiceJet regarding payment catch-up plans after securing a loan, the airline fell behind in payments, accumulating a debt of USD14 million to TWC. SpiceJet’s offer to pay USD435,000 per month to settle the arrears was rejected by TWC due to concerns over SpiceJet’s financial track record.

TWC previously obtained a ruling in the UK High Court in March 2024, ordering SpiceJet to return the leased assets. While SpiceJet participated in those proceedings, the assets remained in India. In April, the Delhi High Court initially ordered SpiceJet to return the aircraft but allowed them to retain the engines. However, the recent ruling mandates the return of both the aircraft and engines, criticizing SpiceJet for violating lease terms by separating engines from their designated aircraft and installing them on other planes.

The court expressed concern that such actions could significantly devalue the aircraft for the lessor and emphasized SpiceJet’s failure to meet its financial obligations. The ruling stated that the UK court orders are enforceable under Indian law, and SpiceJet has already had an opportunity to defend itself in the UK courts.

SpiceJet’s legal counsel informed the court of potential challenges in complying with the order by the end of May, citing logistical issues and the need for inspections. They highlighted the dispersed locations of the aircraft and the coordination required for their return.

As the deadline approaches, SpiceJet faces mounting pressure to adhere to the court’s decision and return the leased assets to TWC, marking a significant development in the ongoing legal battle between the airline and its lessor.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com