NCLT Issues Notice to SpiceJet on Aircraft Lessor’s Insolvency Petition

In a recent development, the National Company Law Tribunal (NCLT) has issued a notice to SpiceJet, a prominent budget carrier in India, on a petition filed by Aircastle (Ireland) Ltd., an aircraft lessor. Aircastle is seeking the initiation of insolvency resolution proceedings against SpiceJet. The two-member Principal bench of the NCLT, led by President Ramalingam Sudhakar, has directed SpiceJet to appear for the next hearing scheduled for May 17.

SpiceJet’s spokesperson responded to the notice, stating that they issued it as part of the normal course of proceedings. The spokesperson clarified that there was no adverse ruling against the airline. The court has recognized that both parties are currently engaged in settlement discussions, and they are allowed to continue pursuing the same.

This notice from the NCLT comes at a challenging time for SpiceJet, as its crisis-hit rival, Go First, has recently filed for voluntary insolvency resolution proceedings. The COVID-19 pandemic has severely impacted the aviation industry, and these developments highlight the turbulent environment in it.

Aircastle filed the insolvency petition against SpiceJet on April 28. However, SpiceJet has confirmed that it does not have any aircraft leased from Aircastle in its fleet. Therefore, the filing of the petition is not expected to have a direct impact on the airline’s day-to-day operations.

SpiceJet

It is worth noting that this is not the only insolvency petition pending against SpiceJet. According to the NCLT website, also two more petitions for insolvency resolution proceedings have been filed against the airline. Willis Lease Finance Corporation filed its plea on April 12, while Acres Buildwell Private Ltd filed its petition on February 4. These petitions will likely add further complexity to the legal proceedings involving SpiceJet.

The aviation industry has been grappling with significant challenges due to the pandemic, including travel restrictions, reduced passenger demand, and financial constraints. Many airlines worldwide have faced severe financial difficulties, leading to bankruptcies and insolvency proceedings. The situation in India is no different, as airlines continue to navigate the uncertain landscape and seek ways to stabilize their operations.

SpiceJet, like other carriers, has implemented various measures to adapt to the ongoing crisis. These include cost-cutting measures, fleet rationalization, renegotiation of lease agreements, and exploring alternative revenue streams. The airline has also expressed optimism about the potential recovery of the industry as vaccination rates increase and travel restrictions ease.

However, as the insolvency resolution proceedings move forward, SpiceJet will need to present a strong defense and demonstrate its ability to address the concerns raised by the petitioners. The upcoming hearing on May 17 will likely shed more light on the matter and determine the course of action going forward. The airline will strive to reach a settlement with Aircastle or navigate the legal proceedings to protect its interests and ensure its long-term viability in the challenging aviation sector.

Also Read: Indian Aviation News 

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