Spicejet Reaches Out of Court Settlement With Irish Lessor

Published: 23rd March 2015 02:50 PM  |   Last Updated: 23rd March 2015 02:50 PM   |  A+A-


NEW DELHI: Budget carrier SpiceJet today said it has reached an out of court settlement with an aircraft lessor over default on aircraft rentals.

"SpiceJet Limited has today (March 23, 215) entered into settlement agreement with its lessor Wilmington Trust SP Services (Dublin) Ltd with regard to aircraft operated by company," SpiceJet said in a regulatory filing today.

Under the said settlement agreement, the lessor has agreed to withdraw the said court proceedings and deregisteration process of aircraft subject to SpiceJet satisfying the terms of settlement, it said.

Meanwhile, the airline today moved Delhi High Court against its recent order directing DGCA to de-register six Boeing 737 aircraft given on lease to the low cost carrier by some Irish firms, including Wilmington Trust SP Services (Dublin) Ltd.

The carrier sought an urgent hearing of the matter saying once its planes are de-registered by Directorate General of Civil Aviation (DGCA), it won't be able to fly them which in turn would affect the people who have booked tickets months in advance.

The matter was mentioned before a bench of justices B D Ahmed and Sanjeev Sachdeva which directed that it be listed for hearing today.

In a blow to the airline, a single judge bench of the high court had on March 19 directed the DGCA to de-register six Boeing 737 aircraft given to the carrier.

An airline cannot operate an aircraft once it is de-registered by aviation regulator DGCA.

The Irish firms had moved the court seeking directions to DGCA to deregister the aircraft given on lease to the airline as the aviation regulator had not carried out the exercise despite several representations by the firms.

The firms had said that they had sought deregistration of the aircraft as their lease with SpiceJet had been terminated due to alleged default in payment of lease rents by the airline.

The court had directed DGCA to "forthwith" de-register the aircraft saying once the creditors fulfilled the conditions prescribed in Aircraft Rules, the aviation regulator was "mandatorily required to cancel registration".

The court had said the petitioner companies, AWAS Ireland Ltd and Wilmington Trust SP Services (Dublin) Ltd, had fulfilled the conditions stipulated in the Rules, and therefore, DGCA had no discretion in the matter.

It had also directed DGCA to decide within two weeks the companies' plea for export of the aircraft out of the country and disposed of the pleas of the Irish firms.

Spicejet, which currently has 32 aircraft in its fleet, had argued that de-registration of the aircraft would impinge upon public interest.

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