Why Are Four SpiceJet Boeing 737 Max Jets Facing Repossession | Explained

Aircraft lessors have initiated the process of repossessing four Boeing 737 Max aircraft leased to SpiceJet after the cash-strapped airline allegedly defaulted on lease rental payments, according to reports.

The finance leasing arm of the Industrial and Commercial Bank of China (ICBC) has approached the Directorate General of Civil Aviation (DGCA) seeking deregistration of the aircraft, a mandatory step before leased planes can be repossessed under Indian aviation rules.

The move comes as SpiceJet continues to battle financial stress, with a large part of its fleet remaining grounded and the airline struggling to restore aircraft to service.

DGCA Begins Deregistration Process

The requests have been filed under the Irrevocable De-registration and Export Request Authorisation (IDERA) framework, which allows aircraft lessors to seek deregistration and repossession of leased planes in the event of payment defaults, Mint reported.

According to the report, the applications relate to four Boeing 737-8 Max aircraft and were submitted by Dublin-based lessors Sky High LXXVIII Leasing Co. and Sky High LXXX Leasing Co., both linked to ICBC Financial Leasing. The DGCA received the requests on July 9 before publishing the notices on its website.

The development follows the passage of aviation legislation last year that strengthened the rights of global aircraft lessors to recover leased aircraft and engines if Indian carriers default on their payment obligations.

Will Operations Be Affected?

A SpiceJet spokesperson said the four aircraft have remained grounded for more than a year and their deregistration will not affect the airline's scheduled flight operations, according to The Economic Times. The airline added that it remains in discussions with the lessors and aircraft manufacturers to bring the planes back into service.

The spokesperson also said the affected aircraft were already out of service because of industry-wide engine issues and that removing them from the fleet would eliminate lease rental costs on assets that have remained non-operational for a prolonged period, Mint reported.

The repossession process comes at a difficult time for SpiceJet. Nearly 80% of its fleet remains grounded, while the airline is currently operating only around a dozen aircraft, ET reported.

Despite raising ₹3,000 crore in 2024, much of the capital was used to clear statutory dues, including GST, TDS and provident fund liabilities. The report also said the airline has faced operational challenges, including high flight cancellations and poor on-time performance in recent months.