SpiceJet Settles $16.7M Aircraft Lease Dispute with ELFC
SpiceJet (SG, Delhi International) has successfully settled its USD 16.7 million lease dispute with Engine Lease Finance Corporation (ELFC), as announced in a filing with the Bombay Stock Exchange on September 24. The low-cost carrier confirmed that the matter was resolved “amicably” for an undisclosed amount, which is reportedly lower than the original claim, reported ch-aviation.com.
The lease dispute stems from issues related to nine aircraft engines, with ELFC pursuing legal action against SpiceJet in the National Company Law Tribunal (NCLT) for breaches dating back several years. SpiceJet had previously defaulted on settlement agreements and repayment plans, continuing to operate the last retained engine despite having agreed not to do so. The ongoing legal case, titled Engine Lease Finance BV v SpiceJet Limited (case no: C.P. (IB) – 291/2024), is scheduled for mention at the NCLT on September 26.
SpiceJet’s Managing Director, Ajay Singh, expressed satisfaction with the settlement, stating, “We are pleased to have reached a mutually beneficial settlement with ELFC, which enables us to move forward with a clean slate. This agreement not only resolves past issues but also strengthens our position as we embark on the next phase of growth and expansion.”
The resolution of this dispute comes at a critical time for SpiceJet, which earlier this month raised INR 30 billion (USD 358.9 million) in capital. The filing notes that this capital influx has significantly improved the airline’s financial standing. A substantial portion of the funds raised will be allocated to resolving ongoing lease disputes across various legal platforms involving multiple airframe and engine lessors.
As part of the settlement with ELFC, both parties are expected to formalize the agreement, aiming to withdraw all ongoing litigation and end the disputes between them. This development not only alleviates immediate financial pressures for SpiceJet but also positions the airline for future growth, allowing it to focus on expanding its operations and enhancing its service offerings.
The resolution of the lease dispute marks a significant step in SpiceJet’s efforts to stabilize its operations amid ongoing financial challenges. By addressing these legal matters, the airline is better positioned to enhance its fleet management and improve overall operational efficiency.
With the financial boost from the recent capital raise and the settlement with ELFC, SpiceJet aims to strengthen its competitive stance in the aviation market. The airline’s leadership is optimistic about the future, with plans to enhance its fleet and expand its route offerings, paving the way for a new phase of growth and recovery in the post-pandemic landscape.
As SpiceJet moves forward, the focus will be on leveraging these developments to rebuild trust with stakeholders, ensure compliance with lease agreements, and strategically position itself in the evolving airline industry. The upcoming NCLT hearing will provide further clarity on the airline’s legal standings and future plans, marking an important moment in its journey towards recovery and growth.
Related news: https://airguide.info/?s=SpiceJet
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com