Indian carrier, SpiceJet, is facing insolvency proceedings. Aircastle Ltd, based in Ireland, has petitioned the National Company Law Tribunal (NCLT) to initiate a bankruptcy proceeding against the budget carrier. The NCLT issued a notice to the airline requesting a response and scheduled a hearing on May 17. SpiceJet stated that it is in talks with Aircastle to reach an agreement.
In the case of Aircastle, notice was issued in the normal course. SpiceJet received no negative rulings. The court has acknowledged that parties are in settlement discussions and that they may continue to pursue the same, a SpiceJet spokeswoman said in a statement. SpiceJet said last week that it does not operate any Aircastle aircraft and that the petition will have no effect on its operations. On April 28, Aircastle filed a petition against SpiceJet, citing unpaid lease payments for four Boeing 737 aircraft and requesting the beginning of Corporate Insolvency Resolution Process (CIRP) procedures under Section 9 of the Insolvency and Bankruptcy Code (IBC).
Spicejet’s financial difficulties are well known. Given the company’s massive liabilities, its auditor has repeatedly expressed doubts about its ability to continue as a going concern. For the nine months ending December 31, 2022, the company reported a loss of Rs 1,514 crore. As of December 31, it had a negative net value of Rs 5,801 crore. The airline’s domestic market share is 6.9 percent.
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