SpiceJet ready to return leased engine to Brussels
Troubled low-cost airline SpiceJet has informed the Delhi High Court that it is prepared to return a leased engine to its lessor, Engine Lease Finance BV, in Brussels, Belgium, at its own expense, following failed settlement talks between the two parties.
The court has asked both SpiceJet and the lessor to nominate a third-party agency to inspect the engine’s condition before it is flown back to Brussels. It has also ordered that the engine be kept in its current condition for inspection, in accordance with the aircraft engine general agreement.
Both sides are yet to nominated a third-party agency for the inspection. This case will next be heard on Monday.
The lessor had approached the high court to hold SpiceJet responsible for covering the costs of returning the engine and restoring it to a usable state. The lessor claims the engine is currently unfit for service and cannot be returned to Europe, alleging SpiceJet’s negligence in maintaining it.
SpiceJet denies these accusations, citing normal wear and tear as the cause of the engine’s current condition.
Engine Lease Finance had moved to court in December after unsuccessful settlement talks with SpiceJet, alleging partial payments and failure to meet the terms of their agreement.
In October, SpiceJet had agreed to pay over $2 million by 25 January and return the leased engine by that date.
Engine Lease Finance had initially approached the court in September, stating that it had terminated its lease with SpiceJet and received back eight of nine engines. The lessor sought a court order to restrain SpiceJet from using the one engine that had not been returned after the termination of the lease.
According to the agreement, SpiceJet cannot use the engine once the lease ends.
The financially strained airline is facing legal battles over unpaid dues in various courts. On 29 January, the Delhi High Court ordered SpiceJet to pay $4 million to two engine lessors by 15 February or risk grounding of the leased engines.
In a cost-cutting move, the airline announced layoffs of 1,4 00 employees and plans to reduce its fleet, aiming to save around ₹100 crore annually.
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Published: 14 Feb 2024, 06:20 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.