Indian low-cost carrier SpiceJet has resolved a financial dispute over engine maintenance payments that had threatened the company with liquidation.
The case concerned engine maintenance services contracted under a 10-year deal with SR Technics in 2011. In late 2021, an Indian court ordered the carrier to be wound up for non-payment of $24 million under the terms of the maintenance deal.
Earlier this year the Indian High Court rejected SpiceJet’s appeal against the winding-up petition brought by Credit Suisse, which was mandated to receive the payment.
Now, though, SpiceJet has settled with Credit Suisse, consenting to pay a certain amount up front and the remainder over an agreed period.
In December the airline reached another settlement, with De Havilland of Canada, related to aircraft purchase and component solution agreements.
The Canadian manufacturer had claimed $43 million from the airline for failure to take delivery of aircraft.
These settlements may mark a turning point for SpiceJet, which managed to post a small profit in the final quarter of last year after massive loss in the prior-year period.
However, any recovery is fragile, with SpiceJet only just clawing itself into the black at the end of 2021 thanks to a compensation deal with Boeing over the 737 MAX and concessions from lessors.
SpiceJet’s chairman and managing director, Ajay Singh, said: “I am happy SpiceJet has reported a profit in Q3 fiscal year driven by excellent logistics operations, a rebound in passenger traffic and various accommodations from aircraft manufacturers and lessors."
The airline reported that aircraft rental concessions had saved it around $8 million in the three months to December 31.
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