Tag Archives: lessor

SpiceJet settles dispute with Lessor, saving costs

 

SpiceJet has officially resolved a USD 49.8 million (INR 413 Crore) dispute with Echelon Ireland Madison One Ltd., marking a significant achievement for the airline. This settlement not only translates to substantial cost savings but also contributes to the overall strengthening of SpiceJet’s financial position.

Key Highlights of the Settlement:

Major Cost Savings: The resolution with Echelon Ireland Madison One Ltd. translates into significant savings of USD 48 million (INR 398 Crore) for SpiceJet.

Acquisition of Two Airframes: As part of the agreement, SpiceJet gains the acquisition of two airframes, enhancing its fleet and operational capabilities.

Continued Success: This settlement represents the third major resolution for SpiceJet following recent fundraising efforts. Cumulatively, these successful settlements have resulted in total savings of INR 685 Crore, contributing significantly to SpiceJet’s financial stability and balance sheet.

Ajay Singh, Chairman and Managing Director, SpiceJet, expressed satisfaction, stating, “We are pleased to announce the successful resolution of our dispute with Echelon Ireland Madison One Ltd., marking another significant milestone for SpiceJet. This settlement not only underscores our commitment to financial prudence but also enables us to further fortify our fleet with the acquisition of two airframes.”

This announcement comes after SpiceJet’s recent successful resolutions, including the settlement of a USD 29.9 million (INR 250 Crore) dispute with Celestial Aviation on February 28, resulting in savings of INR 235 Crore. Additionally, on March 5, SpiceJet reached settlement terms with aircraft leasing firm Cross Ocean Partners, resolving a dispute of approximately USD 11.2 million (INR 93 Crore). As part of this arrangement, SpiceJet will also benefit from the transfer of an airframe and an engine at no additional cost, contributing to its operational capabilities.

Delhi HC grants permission to lessor for inspection of leased engine to SpiceJet

In a significant legal development, the Delhi High Court has given approval for Engine Lease Finance BV to conduct inspections on an engine it leased to SpiceJet. The court ruling permits the lessor to inspect the engine both during its grounded state and once at the time of re-delivery. Additionally, SpiceJet has been instructed by the court to maintain the current status of the engines, with the exception of essential refurbishment activities.

The legal dispute arose when Engine Lease Finance BV claimed that SpiceJet was “cannibalizing” parts of the engine, contradicting the airline’s statement on January 15 that the engine had been grounded. SpiceJet contested these allegations.

SpiceJet and Engine Lease Finance BV had previously informed the court in October of the previous year that they had reached an interim settlement. According to the terms of the settlement, SpiceJet is obligated to pay over USD 2 million to the engine lessor by January. The lessor emphasized its commitment to not terminate the settlement but warned that it would approach the court again if SpiceJet fails to comply with the agreed-upon terms.

In October 2023, a SpiceJet spokesperson stated that both parties had mutually decided to resolve their dispute amicably outside the courtroom. The court proceedings were adjourned to February 8, 2024.

Earlier, the court had set a deadline of October 16 for SpiceJet to settle with Engine Lease Finance BV, cautioning that failure to do so would result in an order restricting the use of leased engines. Despite returning eight of the nine engines, SpiceJet continued to use one. The lessor sought court directions to restrain SpiceJet from utilizing the remaining engine.

Delhi HC issues notice to Go First’s RP & DGCA

The Delhi High Court issued notices to Go First’s resolution professional and the Director General of Civil Aviation (DGCA) in response to a plea filed by aircraft lessors BOC Aviation (Ireland) Ltd, ACG Aircraft Leasing Ireland and DAE (SY22) 13 Ireland Designated Activity Company. The court will give additional directions on September 19 for the maintenance of the Go First fleet.

During the proceedings, BOC Aviation highlighted the poor condition of Go First’s planes during the inspection. The main body and landing gear were found to be inadequately maintained and dirty. Algae was discovered on the plane, likely due to unusual rain, and water had accumulated on the aircraft due to a lack of covering. Scratches on the panels and signs of subpar maintenance were also noted.

BOC Aviation further informed the court that their aircraft had been in long-term storage in Coonoor even before the moratorium, with engines removed in December 2022, and no commercial flights have taken place since December 2022, adding to the deterioration of their planes.

In addition to BOC Aviation, another aircraft lessor, ACG Aircraft Leasing, has sought court intervention and further instructions in a recent plea. This request follows their earlier private filing, where they urged Go First to replace missing components, including fan blades, in their leased aircraft. The court has requested a resubmission of documents for this case, which will be considered later. The court is also scheduled to hear the ongoing deregistration case filed by multiple aircraft and engine lessors.

In an interim order issued in July, the Delhi High Court allowed lessors to inspect their parked aircraft. This order was subsequently upheld by both the division bench of the High Court and the Supreme Court.

Go First has filed for insolvency due to financial difficulties attributed to faulty engines from Pratt and Whitney. (Source: Republic World)

Lessor receives NCLAT nod to inspect aircraft leased to Go First

The National Company Law Appellate Tribunal (NCLAT) yesterday granted permission to Ireland-based lessor Jackson Square Aviation Ltd to inspect its aircraft leased to cash-strapped Go First.

This decision follows a similar observation made in the case of Engine Lease Finance BV – the first lessor to approach the tribunal – on August 18 wherein it had modified the National Company Law Tribunal (NCLT)’s July 26 order to permit the engine lessor to carry out inspection of four engines of aircraft leased to Go First.

Disagreeing with a portion of the NCLT’s ruling that restricted the lessor from inspecting the engines, the NCLAT had issued its own directive asking the Resolution Professional (RP) to schedule an inspection within 10 days.

Favouring Go First, the NCLT had refused to restrain it from using leased aircraft for its operations as they are essential for the airline to keep going. Challenging the NCLT’s order, Jackson filed the plea against the RP of the airline, Shailendra Ajmera.

Earlier this month, the high court had said that scheduled maintenance does not encompass the operation of flights, and it restrained troubled Go First to continue with maintenance flights.

A bench of Justice Tara Vitasta Ganju said that the RP hasn’t shown any sense of urgency or an immediate serious threat to the aircraft that would necessitate the RP to suddenly and unexpectedly operate them without prior notice.
“The respondent no.9/ RP of Go Airlines has also not been able to show any urgency or any grave imminent threat to these aircraft to suddenly and without any prior notice, compel the respondent no.9 RP to fly these aircraft,” she had said.

“Prima facie, the term – scheduled maintenance cannot be understood to include flying the aircraft even if it is a non-commercial flight. Thus, respondent no.9/ RP of Go Airlines cannot be permitted at this stage, to continue with these handling/maintenance flights,” the judge had added.

Lessor moves NCLAT to stop Go First from flying aircraft

Jackson Square Aviation Ireland Ltd, the lessor for the grounded airline Go First, has moved the National Company Law Appellate Tribunal (NCLAT) seeking directions to prevent its parked aircraft from being used for flying by the airline.

The lessor’s legal action is against the resolution professional (RP) of the airline, Shailendra Ajmera, and is scheduled for a hearing on Thursday at the NCLAT, a counsel connected to the case confirmed to Mint.

According to its counsel, Jackson Aviation is compelled to move the NCLAT because the National Company Law Tribunal (NCLT) did not grant the relief sought by the aircraft lessor, which includes the right to inspect the aircraft.
The latest plea also requests NCLAT to allow the lessors access to their aircraft in the manner that was allowed for Engine Lease Finance BV, an engine lessor that gained rights to access its engines on 18 August.

In the engine lessor’s case, the NCLAT modified the NCLT’s 26 July order that had allowed Go First to operate the leased aircraft. In its own directive, the NCLAT disagreed with the part of the NCLT’s order that restricted the lessor from inspecting the engines. Furthermore, in its 18 August order, the Appellate Tribunal directed the RP to set an inspection date within 10 days.

According to media reports, Go First’s Ireland-based lessor, ACG Aircraft Leasing, informed the court that critical components, including fan blades, escape slides, and other vital parts are missing from at least two aircraft. ACG submitted pictures and details of the missing items from two Airbus A320 planes in a non-public filing at the Delhi High Court on 28 July.

The list of missing items includes the captain’s “side stick” used for flying the aircraft, a tiller for ground steering, engine fan blades, a partially absent toilet seat, and a removed escape slide. (Source: Mint)

SpiceJet settles litigation with lessor and its affiliates for Boeing aircraft

Low-cost carrier SpiceJet Ltd said on Tuesday it has entered into a settlement agreement with aircraft lessor Goshawk Aviation Ltd and its affiliates related to three Boeing aircraft, reports Reuters.

The airline said that the agreement – the terms of which are confidential – ends all litigation proceedings between the parties, adding that this will allow SpiceJet to add two more fuel-efficient Boeing 737 MAX aircraft and one Boeing 737-800 NG aircraft to its fleet.

Recently, SpiceJet has been in trouble with its lessors, Ireland-based Alterna Aircraft Ltd and United Arab Emirates aeronautics firm AWAS, who asked the Indian aviation regulator to de-register their planes. (Source: Reuters)