SpiceJet settles ₹250 crore dispute with aircraft lessor Celestial Aviation

New Delhi [India], February 28 (ANI): Airline operator SpiceJet and Celestial Aviation, a subsidiary of AerCap, one of the largest aircraft lessor groups, have mutually settled their USD 29.9 million (Rs 250 crore) dispute through amicable negotiations, avoiding litigation.

The representatives of both parties informed a bench of NCLT last week that settlement terms had been reached, and thus requested an adjournment. The Court graciously granted the adjournment.

The matter is now scheduled to be formally withdrawn on March 1, 2024.

SpiceJet recently secured investments totaling Rs 1,060 crore through a preferential issue, with notable investors including Aries Opportunities Fund Limited and Elara India Opportunities Fund Limited. Part of these funds will be allocated towards settling past liabilities.

Ajay Singh, Chairman and Managing Director, SpiceJet, said, "I am pleased to announce that SpiceJet and Celestial Aviation have successfully resolved our USD 29.9 million dispute through mutual agreement. This settlement marks a significant step forward for both parties and underscores our commitment to finding amicable solutions to complex challenges."

"With this resolution, we can now focus on revamping our fleet and driving our business forward. I am grateful for the support of our stakeholders, including our investors, as we navigate through this process."

The airline reportedly plans a Rs 22.50 billion fundraising effort by selling shares and warrants.

SpiceJet, which has been facing multiple headwinds, is of the view that the raised funds are expected to play a pivotal role in financing operational expansion initiatives, including fleet enhancement, route network expansion, and technological advancements.

In its latest move, aiming to save about Rs 100 crore on an annual basis, low-cost airline SpiceJet is set to lay off at least 1,000 employees.

On February 13, a spokesperson of the airline SpiceJet confirmed that the manpower rationalisation was part of its cost-cutting strategy, besides ensuring profitable growth.

The airline, which was launched in 2005, currently has around 9,000 employees and 30 planes, 10 of which are wet-leased. In the pre-pandemic year 2019, the airline had a fleet of 118 planes and more than 15,000 employees.

Meanwhile, SpiceJet reduced its net loss to Rs 428 crore in Q2 FY2024, a significant improvement from the net loss of Rs 835 crore in Q2 FY2023.SpiceJet operates about 250 daily flights to 48 destinations within India and to international destinations. Its fleet is a mix of aircraft, including the Boeing 737 Max, Boeing 700 and Q400s.