SpiceJet has been slapped with fresh insolvency cases regarding defaults on rental and employment dues by a former pilot and three Ireland-based aircraft lessors, including NGF Genesis, NGF Charlie and NGF Alpha. The lessors have alleged in the National Company Law Tribunal (NCLT) that the airline has failed to make rental payments worth $12.4 million. A former SpiceJet pilot, Devesh Bbyan, has accused the airline of non-payment of employment dues of around Rs 1.70 crore between May 2020 and August 2022, according to the Mint.
Prior to this, a case regarding the theft of aircraft parts, including engines from five leased Boeing 737 freighter planes has been filed against the legally troubled airline in NCLT.
SpiceJet’s Legal Troubles
The Delhi bench of the insolvency court has adjourned the hearing of the matter till April as the troubled airline sought more time to respond to the accusations. Additionally, the bench has asked the former pilot to clarify whether his claims fall under Section 10A of the Insolvency and Bankruptcy Code. Section 10A of the IBC offers a temporary relief to businesses affected during the pandemic years particularly on or after March 25, 2020 as the period for which the ex-pilot has sought dues falls during the Covid-19 times.
These new cases have added more troubles for the already legally strained airline. As of February, nearly 20 cases of insolvency have been filed against SpiceJet, mainly by aircraft lessors, vendors and pilots. According to the Mint, five of these lawsuits have been settled, two are under settlement, seven cases are pending, and two have been dismissed.
SpiceJet’s Improving Financial Health
This comes at a time when the financially strained airline is gradually improving its financial health. In Q3 FY25, the airline reported a profit after tax of Rs 26 crore driven by improved performance.
“For the first time in a decade, the company turned net worth positive- an important milestone that underscores the success of our turnaround strategy,” said SpiceJet chairman and MD, Ajay Singh, during the Q3 earning’s call.
