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SpiceJet, the budget airline, is facing mounting legal challenges as three Ireland-based aircraft lessors and a former pilot have filed insolvency petitions against the airline. These pleas, totaling USD 12.68 million (approximately ₹110 crore), have been brought before the National Company Law Tribunal (NCLT), triggering a fresh round of financial troubles for the airline.
The Insolvency Pleas Against SpiceJet
Three aircraft lessors—NGF Alpha, NGF Genesis, and NGF Charlie—have filed insolvency petitions under Section 9 of the Insolvency and Bankruptcy Code (IBC). The lessors allege that SpiceJet has defaulted on payments, totaling USD 12.68 million. SpiceJet has requested more time to resolve these issues as settlement talks are ongoing.
During a recent hearing at the NCLT, SpiceJet’s legal counsel requested additional time to consult with the airline about its next steps. The NCLT agreed and scheduled the next hearing for April 7, 2025. The lessors claim that SpiceJet has violated terms of lease agreements by allegedly stealing parts from Boeing 737 aircraft, including engines, and using them in other planes.
Former Pilot’s Insolvency Claim
In addition to the aircraft lessors, a former SpiceJet pilot has also filed an insolvency plea. The NCLT is considering whether this claim falls under the provisions of Section 10A of the IBC, which prohibits insolvency applications for defaults occurring after March 25, 2020. The NCLT will revisit this matter on April 15, 2025.
SpiceJet’s Ongoing Legal Troubles
SpiceJet, which has been in operation for 19 years, is no stranger to legal battles. The airline is currently facing multiple insolvency petitions from creditors, including other aircraft lessors such as Willis Lease, Aircastle Ireland Ltd., and Wilmington. These petitions are ongoing before both the NCLT and the appellate tribunal, NCLAT.
Despite these financial challenges, SpiceJet remains focused on resolving its liabilities. In September 2024, the airline raised ₹3,000 crore by selling shares to qualified institutional buyers. This fund is intended to help settle debts with creditors, including aircraft and engine lessors, vendors, and financial institutions.
What Lies Ahead for SpiceJet?
As the airline continues to face financial difficulties, its ability to resolve these insolvency petitions will be crucial. The NCLT hearings in April 2025 could decide the airline’s future course of action. SpiceJet is under pressure to manage its obligations and maintain its operations amidst these ongoing legal disputes.
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