SpiceJet hit with fresh insolvency claims from Irish lessors and former pilot

SpiceJet Ltd has been hit with fresh insolvency claims from three Ireland-based aircraft lessors and a former pilot over defaults on rental and employment dues, just as the financially strained airline prepares to revive operations.

Three Irish lessors—NGF Genesis Ltd, NGF Charlie Ltd, and NGF Alpha Ltd—have alleged that SpiceJet defaulted on rental payments, with their combined claims amounting to $12.4 million.

These entities approached the National Company Law Tribunal (NCLT) after previously serving a legal notice on the airline in December, accusing it of theft of aircraft parts, including engines, from five leased Boeing 737 freighter planes.

Additionally, a former SpiceJet pilot, Devesh Bbyan, has filed a claim for ₹1.70 crore towards unpaid employment dues for March 2020 to August 2022.

During a brief hearing at the Delhi bench of the insolvency court, SpiceJet sought time to respond as its settlement talks were underway. Consequently, NCLT adjourned its hearing of the lessors’ cases until April.

In the pilot’s case, NCLT directed the budget airline to file a reply and the pilot to clarify how his claims were not barred under Section 10A of the Insolvency and Bankruptcy Code. 

As a temporary relief to businesses affected by the pandemic years, IBC’s Section 10A bars insolvency proceedings for defaults occurring on or after 25 March 2020—the day after India implemented its first covid curfew.

Also read | NCLT orders liquidation of Go First, ending 20-month insolvency saga

Insolvency petitions targeting SpiceJet

These fresh claims add to a growing list of insolvency petitions against the financially strained SpiceJet. 

As of February, around 20 such cases had been filed with the NCLT Delhi bench, primarily by aircraft lessors, vendors, and pilots. Among these, five have been settled and withdrawn, two are under settlement discussions, seven remain pending, and two have been dismissed. 

Notably, none of the cases has yet resulted in full-fledged insolvency proceedings.

In February, two former pilots of SpiceJet approached the Delhi NCLT seeking to declare the airline bankrupt over unpaid dues totaling ₹3 crore.

The aircraft lessors in these cases have accused SpiceJet of both defaulting on dues and allegedly misappropriating parts from leased planes. 

Meanwhile, SpiceJet is working to resolve its disputes with creditors following its recent ₹3,000 crore fundraising through a qualified institutional placement of shares.

SpiceJet has faced severe financial and operational challenges since the pandemic struck. Its domestic market share dropped from 7.3% in January 2023 to 2.3% in August 2024, with 36 of its aircraft currently grounded. According to the Directorate General of Civil Aviation, SpiceJet carried just over 6 million passengers in 2024, holding a market share of 3.7%.

To revive operations, the airline plans to bring 30 Boeing 737 MAX aircraft back into service in 12-15 months. On 29 January, SpiceJet reintroduced its first ungrounded 737 MAX into operations.

Also read | Go First’s foreign funding push to test India’s insolvency framework