NEW DELHI: Days after Go First filed for bankruptcy, another Indian carrier, SpiceJet, is facing insolvency proceedings.
Ireland-based aircraft leasing company Aircastle Ltd has moved the Principal Bench of the National Company Law Tribunal (NCLT) to launch a bankruptcy process against the budget carrier.
The NCLT issued a notice to the airline seeking its reply and posted the matter for hearing on May 17. SpiceJet said it is in talks with Aircastle to arrive at a settlement.
“In the Aircastle issue, notice was issued in the normal course. There was no adverse ruling against SpiceJet. The court has recognised the fact that parties are under settlement discussions and they can continue to pursue the same,” said a SpiceJet spokesperson in a statement.
SpiceJet had last week claimed it does not have any Aircastle aircraft in its fleet and that the petition will have no impact on its operations.
Aircastle had filed the petition against SpiceJet on April 28, claiming unpaid dues for leasing four Boeing 737 aircraft and sought initiation of Corporate Insolvency Resolution Process (CIRP) proceedings under Section 9 of the Insolvency and Bankruptcy Code (IBC).
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The financial woes of Spicejet are well known. Its auditor had time and again raised concerns about the company’s ability to remain a going concern, given its huge liability.
The company reported a loss of Rs 1,514 crore for the nine months period ending December 31, 2022. It has a negative net worth of Rs 5,801 crore as on December 31.
The airline’s share in the domestic market is 6.9 per cent.
The development comes less than a week after another low-cost carrier — Go First — voluntarily filed bankruptcy citing a severe financial crisis due to the grounding of about half of its Airbus A320 Neo fleet due to faulty engines provided by Pratt and Whitney.