SpiceJet resolves legal dispute with Irish lessor

New Delhi: Budget carrier SpiceJet on Monday said it has resolved a legal dispute over aircraft rentals with one of its lessors, which will now allow the airline to retain three Boeing 737-800s in its fleet that has seen substantial reduction due to the financial crisis last year.

The airline said that the issue with the Wilmington Trust SP Services (Dublin) Ltd, which had along with other leasing firms dragged it to court seeking deregistration of its three leased aircraft, has been resolved amicably.

"SpiceJet Ltd has today (March 23) entered into a settlement agreement with its lessor Wilmington Trust SP Services (Dublin) Ltd with regard to aircraft operated by the company," the airline said in a regulatory filing today.

In a blow to SpiceJet, a single judge bench of Delhi High Court had on March 19 directed DGCA to de-register six Boeing 737 aircraft operated by the carrier. An airline cannot operate an aircraft once it is deregistered by DGCA.

Soon after the Court's directives, SpiceJet had said it was in dialogue to resolve the dispute amicably.
Under the said settlement agreement, the lessor has agreed to withdraw the court proceedings and deregistration process of aircraft subject to the airline satisfying the terms of settlement, SpiceJet said.

The airline's fleet size currently stands at 32 planes with 17 Boeing 737 and 15 Bombardier Q400s.

Almost facing a shut down last year due to a cash crunch, SpiceJet is currently being revived under its new owner Ajay Singh, who bought its erstwhile promoter Maran family's entire 58.46 per cent stake as part of a deal.

As per the plan, Singh has to invest Rs 1,500 crore in the carrier to give the airline a leg-up. Of this, he has already infused Rs 500 crore, which has been used to clear the dues of the creditors, including oil firms, tax authorities, some of the lessors and also staff salaries.

Singh is scheduled to pump in another Rs 1,000 crore into the carrier in two equal tranches in this month and the next.

As part of its revival, the airline also plans to expand its Boeing 737 fleet to 40-41 aircraft by the end of the summer schedule, which would come into effect from next week.