SpiceJet announced on Thursday (March 7) the resolution of a dispute amounting to Rs 413 crore with aircraft leasing firm Echelon Ireland Madison One Ltd, marking the third such settlement by the beleaguered carrier in less than two weeks.
This latest settlement not only resolves the financial dispute but also brings significant cost savings to the airline. SpiceJet stated that it would save USD 48 million (equivalent to Rs 398 crore) as a result of this settlement. As part of the agreement, SpiceJet will acquire two airframes from Echelon Ireland Madison One Ltd. It’s important to note that an airframe refers to an aircraft without engines.
The acquisition of these airframes is significant for SpiceJet, considering its current challenges and ongoing efforts to raise funds. With this settlement, the airline is now set to acquire a total of three airframes, all of which are Boeing 737 NG planes, through the three recent dispute resolutions.
The airline highlighted that these successful settlements have collectively resulted in total savings of Rs 685 crore. This represents a significant financial relief for SpiceJet amidst its turbulent operational landscape.
Other string of settlements
In its recent string of settlements, SpiceJet reached an agreement with Cross Ocean Partners on March 5, effectively resolving a dispute amounting to approximately USD 11.2 million (around Rs 93 crore). In addition to resolving the financial issue, SpiceJet will also acquire an airframe and an engine as part of this arrangement.
SpiceJet had announced on February 28 that it successfully settled a dispute worth USD 29.9 million (about Rs 250 crore) with Celestial Aviation.
The positive outcomes of these settlements seem to have buoyed investor sentiment, as evidenced by the 3.52% surge in SpiceJet’s share price to Rs 64.10 per share during morning trading on the BSE on Thursday.
These settlements not only alleviate financial pressures on SpiceJet but also underscore the company’s proactive efforts to address challenges and bolster its operational capabilities. With the acquisition of additional airframes, SpiceJet aims to strengthen its fleet and navigate through the turbulent aviation industry landscape more effectively.
