SpiceJet Bankruptcy Cases To Be Heard Afresh By New NCLT Bench After Lessor Settlement

Bankruptcy petitions filed by aircraft lessors against SpiceJet will now be heard afresh by a new bench after the airline reached a last-minute settlement with one of the lessors, an Indian tribunal ruled on Wednesday.

According to a report by Reuters, the decision provides temporary relief to the financially troubled airline but represents a setback for aircraft leasing companies that have been pursuing SpiceJet for outstanding dues for several years.

The National Company Law Tribunal (NCLT) had prepared a judgment covering eight insolvency petitions filed against the airline. However, the withdrawal of one petition following the settlement meant that the prepared order had to be revised.

Fresh Hearings Ordered After Lessor Settlement

With one member of the judicial panel scheduled to retire on Wednesday, the tribunal said there was insufficient time to rewrite and deliver the judgment. As a result, the remaining petitions will have to be considered again by a newly constituted bench.

The development means SpiceJet’s current management will remain in control of the airline while the bankruptcy proceedings are reconsidered.

Following the tribunal’s order, SpiceJet shares pared their losses, trading 2.1% lower at Rs 10.95. The airline described the decision as a “positive step” towards resolving its legal and financial issues.

A SpiceJet spokesperson said the airline remained committed to working constructively with its business partners to reach mutually acceptable solutions.

Financial Pressure Continues for SpiceJet

The amount claimed by the aircraft lessors was not immediately available. The legal proceedings come amid continuing financial challenges for the airline.

SpiceJet’s cash-flow difficulties have previously affected its operations. Reuters reported in June that the airline had delayed salary payments to pilots. The carrier has also secured funding through a government-backed credit programme intended to support the stabilisation of its operations.

The airline has suffered a substantial decline in its market presence over recent years. Its domestic market share stood at around 1.9% in June, compared with approximately 15% at the end of 2019.

The fresh hearings give SpiceJet additional time to address its outstanding disputes with lessors, although the airline continues to face significant financial and operational challenges.