Indian low-cost airline SpiceJet has successfully settled a dispute amounting to Rs 93 crore with aircraft lessor Cross Ocean Partners, marking another step towards financial stability and operational enhancement. The settlement, announced jointly before the Delhi High Court, is expected to yield significant savings for SpiceJet and includes the transfer of an airframe and an engine at no additional cost, fortifying the airline’s operational capabilities.
In a press statement, SpiceJet stated, “This settlement reinforces our commitment to effectively settle with our partners and strengthen our operational capabilities. We remain focused on sustaining the positive momentum and creating long-term value for our stakeholders.”
This resolution comes on the heels of the airline’s recent settlement of a Rs 250-crore dispute with AerCap’s subsidiary Celestial Aviation. The positive developments have had a tangible impact on SpiceJet’s stock performance, with shares rising over 3 percent to Rs 64.70 apiece on the Bombay Stock Exchange (BSE) around 12:30 pm.
Ajay Singh, Chairman and Managing Director of SpiceJet, commented on the settlement, saying, “We are committed to effectively settling with our partners and strengthening our operational capabilities. We remain focused on sustaining the positive momentum and creating long-term value for our stakeholders.”
SpiceJet has 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, aligning with the airline’s strategy to address financial challenges.
Looking ahead, SpiceJet aims to raise Rs 2,250 crore through a fundraising effort involving the sale of shares and warrants. The funds are expected to play a pivotal role in financing operational expansion initiatives, including fleet enhancement, route network expansion, and technological advancements.
In a cost-cutting move, the airline is set to lay off at least 1,000 employees, with the goal of saving about Rs 100 crore annually. This workforce reduction is part of SpiceJet’s broader strategy to ensure profitable growth amidst industry challenges.
Despite facing headwinds, SpiceJet reported a reduced net loss of Rs 428 crore in Q2 FY2024, a significant improvement from the net loss of Rs 835 crore in Q2 FY2023. The airline currently operates approximately 250 daily flights to 48 destinations within India and internationally, utilizing a diverse fleet of aircraft, including the Boeing 737 Max, Boeing 700, and Q400s.
