Embattled Spicejet Faces Fresh Insolvency Pleas

SpiceJet, the embattled budget airline, is grappling with fresh legal challenges as three Ireland-based aircraft lessors—NGF Alpha, NGF Genesis, and NGF Charlie—along with a former pilot, have filed insolvency pleas against it at the National Company Law Tribunal (NCLT). The lessors are seeking to initiate proceedings under Section 9 of the Insolvency and Bankruptcy Code (IBC), claiming unpaid dues of USD 12.68 million (approximately Rs 110 crore). Meanwhile, the pilot’s plea adds to the carrier’s mounting woes.

The lessors, who previously leased five Boeing 737s to SpiceJet, allege the airline defaulted on payments and even resorted to stripping parts, including engines, for use in other aircraft. During recent NCLT hearings, SpiceJet’s counsel requested time to negotiate settlements, prompting the tribunal to schedule the next hearing for April 7, 2025. Separately, the pilot’s case raised questions about Section 10A of the IBC, which bars insolvency claims for defaults post-March 25, 2020, for a year—a Covid-era relief measure. The NCLT deferred this matter to April 15, 2025, for further review.

SpiceJet, operational for 19 years, is no stranger to financial turbulence, facing multiple insolvency petitions from creditors like Willis Lease, Aircastle Ireland, Wilmington, and Celestial Aviation at both NCLT and the appellate NCLAT. No final orders have been issued yet. In September 2024, the airline raised Rs 3,000 crore through a share sale to institutional buyers, aiming to clear dues with lessors, vendors, and financiers. However, these latest filings signal persistent cash flow struggles. With settlement talks underway and hearings looming, SpiceJet’s ability to navigate this storm remains uncertain, casting a shadow over its future in India’s competitive aviation market.