SpiceJet Faces Renewed Financial Turbulence with Fresh Insolvency Claims

SpiceJet, the Indian budget airline, is once again navigating turbulent financial skies, as it faces a fresh wave of insolvency claims from Irish aircraft lessors and a former pilot. This development adds to the airline’s already substantial list of financial challenges, even as it strives to regain operational stability.  

Here’s a breakdown of the situation:

New Insolvency Claims:

• Irish Lessors:
  • Three Ireland-based aircraft lessors, NGF Genesis Ltd, NGF Charlie Ltd, and NGF Alpha Ltd, have filed insolvency claims against SpiceJet, alleging defaults on rental payments.  
  • The combined claims from these lessors amount to a significant $12.4 million.  
  • These lessors had previously issued a legal notice to SpiceJet in December, accusing the airline of misappropriating aircraft parts, including engines, from leased Boeing 737 freighter planes.  
• Former Pilot:
  • A former SpiceJet pilot, Devesh Bbyan, has also filed a claim seeking ₹1.70 crore in unpaid employment dues, covering the period from March 2020 to August 2022.  
  • The NCLT has asked spicejet to respond to the pilots claims, and for the pilot to clarify how his claims are not barred under section 10A of the Insolvency and Bankruptcy code.  

Legal Proceedings:

• The National Company Law Tribunal (NCLT) is handling these new claims.  
• During a recent hearing, SpiceJet requested time to respond to the claims, citing ongoing settlement discussions.  
• The NCLT has adjourned the hearing for the lessors’ cases until April.  
• The NCLT has asked spicejet to file a reply to the pilots claims.
• These new claims add to the large amount of insolvency petitions that have been filed against Spicejet in the NCLT.  

SpiceJet’s Financial Struggles:

• SpiceJet has been grappling with severe financial difficulties, particularly since the onset of the COVID-19 pandemic.
• These financial woes have led to a significant decrease in the airline’s market share and the grounding of a substantial portion of its fleet.
• As of february 2025, there had been approximately 20 insolvancy cases filed against spicejet.
• Spicejet has been working to resolve disputes with creditors, especially after the recent ₹3,000 crore fundraising through a qualified institutional placement of shares.  
• Accusations have also been made of spicejet taking parts from leased aircraft.  

Efforts to Revive Operations:

• Despite the financial challenges, SpiceJet is actively working to revive its operations.  
• The airline plans to bring 30 Boeing 737 MAX aircraft back into service within the next 12 to 15 months.
• SpiceJet has recently reintroduced its first ungrounded 737 MAX aircraft into operation.

Broader Context:

• The aviation industry in India, like globally, has faced immense challenges due to the pandemic.  
• SpiceJet’s situation highlights the ongoing financial pressures faced by many airlines.
• The NCLT is seeing a large amount of aviation related insolvency cases.

Key Takeaways:

• SpiceJet is facing increased financial pressure with new insolvency claims.  
• The airline is attempting to resolve its disputes while also working to revive its operations.
• The NCLT proceedings will play a crucial role in determining the outcome of these claims.
• The financial health of spicejet remains a concern.

It is clear that SpiceJet is in a difficult position. How the airline navigates these legal and financial challenges will be crucial to its future.