A SpiceJet operated Boeing 737-800, which is subject of a legal dispute between the airline and lessor Genesis.
Lessors are facing a difficult time in India again, with struggles to repossess aircraft from bankrupt Go First stirring uncomfortable memories of the failures of Jet Airways and Kingfisher.
However, some succor was provided by an English court last week, which ruled for lessor Genesis against low-cost carrier SpiceJet.
SpiceJet has been the subject of several repossessions in recent years, and the Genesis case concerned a disputed but ultimately successful repossession of a Boeing 737-800 in 2021, during the pandemic.
SpiceJet had already been ordered to pay $5.4 million to Genesis for unpaid rents, but the most recent proceedings concerned the costs of an engine performance restoration shop visit.
The court held that SpiceJet had not returned the aircraft with sufficient flight hours and cycles remaining to the next engine performance restoration, as calculated by reference to the lessee’s MTBR for comparable engines, and was therefore obliged to cover the full costs of the shop visit.
According to law firm WFW, which represented Genesis, the judge also held that "since the lease contained appropriate indemnity language and a lessor determination clause, Genesis was entitled to certify the costs of the breaches of the redelivery conditions." WFW added: “This finding appears to be of significant assistance to the swift resolution of redelivery condition disputes.”
The law firm welcomed the judgement "as a further example of English courts supporting aviation leasing by understanding the risk allocation in a lease, giving effect to the contractual wording agreed by the parties and holding defendants to account where they seek to delay and evade their obligations."
Having previously represented itself SpiceJet did not attend the performance restoration proceedings.
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