SpiceJet may follow Go First's route, as creditor calls for it to be declared insolvent

SpiceJet may follow Go First's route, as creditor calls for it to be declared insolvent

SpiceJet tried to allay fears by calling it a normal course of action and added that the firm didn't face any adverse ruling.

FPJ Web DeskUpdated: Monday, May 08, 2023, 09:56 PM IST
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Image: SpiceJet (Representative)

In an unexpected turn of events, Go First disappeared from websites when consumers tried to look for air tickets, as it applied for insolvency and grounded flights. Immediately after that SpiceJet picked up Rs 400 crore in debt with plans to revive 25 aircraft, in order to capitalise on Go First's absence in the skies.

But in yet another shock to flyers, SpiceJet also faces insolvency, because of its creditors who have filed a case with the National Company Law Tribunal.

Stung by creditors

After this, the NCLT sent a notice to SpiceJet for failure to pay dues to Aircastle, the firm from which it leased four of its Boeing 737 aircraft.

But SpiceJet tried to allay fears by calling it a normal course of action and added that the firm didn't face any adverse ruling.

It also mentioned that the court recognises that both parties are discussing a settlement and can keep doing so.

Not alien to crisis

This is the second time in less than two years that SpiceJet has reached the brink of bankruptcy, after the Madras High Court had ordered its shut down in December 2021.

The decision had come after Credit Suisse, which recently collapsed, had filed a case on behalf of a global maintenance servicces provider.

Before that too, promoter Ajay Singh had bought the airline from the Marans in 2014 as it was about to collapse.

He was also the founder, who had been forced to sell the carrier to the Marans first in the 2000s after facing a crisis.

But the way airlines are disappearing from Indian skies, it will limit the availability of seats at a time when aviation demand is expected to surpass pre-pandemic levels.

With the way pricing works, the rising demand and falling availability will result in higher ticket prices, and passengers will bear the brunt.

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