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Delhi-based low-cost airline SpiceJet is poised to receive a Q400 secured from Nordic Aviation Capital (NAC) as part of a settlement inked last year, the airline said in a statement on Tuesday.
The news of the latest settlement saw SpiceJet’s share rise by over 1 percent on the Bombay Stock Exchange.
The agreement settles all past liabilities for the Q400s leased by NAC to SpiceJet, allowing the airline to acquire full ownership of six Q400s.
“The airline already has five Q 400 aircraft that were earlier owned by NAC. The ownership of these planes has been transferred to SpiceJet. This agreement also heralds immense long-term savings for SpiceJet, liberating the airline from the obligation of regular monthly rentals for these aircraft,” SpiceJet’s statement says, pointing out that the sixth Q400 aircraft is en route to India from Germany and is expected to arrive in Delhi soon.
SpiceJet recently announced four major settlements with key aircraft lessors, resulting in substantial savings of Rs12.52 billion for the airline.
On March 26, SpiceJet announced a settlement with Export Development Canada (EDC), securing full ownership of 13 EDC-financed Q400 aircraft. Per SpiceJet’s records, this agreement resolved liabilities amounting to nearly $91 million, leading to substantial savings of Rs 5.67 billion for the airline.
In addition to the EDC settlement, SpiceJet finalized three other agreements, including those with aircraft leasing firms, Cross Ocean Partners and AerCap. These settlements collectively yielded savings of Rs 6.85 billion for the airline. Moreover, SpiceJet acquired three Boeing aircraft as part of these agreements.
This is good news for the airline, which has been in financial trouble. Many lessors have also been criticizing it for payment delays.
On March 15, Economic Times, a leading economic daily in India, reported that the Delhi High Court had sought a response from the cash-strapped SpiceJet Ltd. on a petition by its aircraft lessor GASL Ireland Leasing A1 seeking enforcement of the UK Court’s decrees that awarded the lessor $5.33 million and $8.49 million in February 2022 and May 2023, respectively.
While issuing a notice to the low-cost airline, the court posted the matter for further hearing on May 27. The airline continues its slow recovery, likely testing investors’ patience.
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