SpiceJet Faces Fresh Insolvency Petitions from Lessors and Pilot

SpiceJet is facing renewed legal troubles as three Ireland-based aircraft lessors NGF Alpha, NGF Genesis, and NGF Charlie have filed insolvency petitions against the budget airline. 

The petitions, submitted under Section 9 of the Insolvency and Bankruptcy Code (IBC), seek the initiation of insolvency proceedings over outstanding dues amounting to USD 12.68 million (~₹110 crore).

During recent proceedings at the National Company Law Tribunal (NCLT), SpiceJet requested additional time to settle the matter, citing ongoing negotiations. The tribunal has scheduled the next hearing for April 7, 2025.

Allegations of Aircraft Part Misuse

The lessors had previously leased five Boeing 737 aircraft to SpiceJet. In their legal notices, they accused the airline of unauthorized removal and use of aircraft parts, including engines, in other planes. This issue has added to the airline’s legal challenges as it continues to grapple with financial distress.

NCLT Examines Insolvency Plea from Former Pilot

Apart from the lessors, a former SpiceJet pilot has also filed an insolvency plea against the airline. However, the NCLT has questioned whether the pilot’s claims are barred under Section 10A of the IBC. This provision, introduced by the government in 2020, prevents the initiation of insolvency proceedings for defaults that occurred after March 25, 2020, for a period of one year, as a measure to protect businesses from pandemic-related financial distress.

The tribunal has given SpiceJet time to assess the applicability of Section 10A in the pilot’s case, with the next hearing scheduled for April 15, 2025.

Ongoing Legal and Financial Challenges

SpiceJet is already entangled in multiple insolvency cases filed by various creditors, including aircraft lessors Willis Lease, Aircastle Ireland Ltd, Wilmington, and Celestial Aviation. These cases are being heard in both the NCLT and its appellate tribunal, NCLAT.

In an effort to stabilise its finances, SpiceJet raised ₹3,000 crore in September 2024 through a qualified institutional placement (QIP). The funds were intended for settling outstanding liabilities with aircraft lessors, engineering vendors, and financiers. Despite this, the airline continues to face mounting financial and legal pressures.

Conclusion 

With hearings scheduled in April, the outcome of these cases will be critical in determining SpiceJet’s financial future and operational stability.

On March 10, 2025, SpiceJet share price opened at ₹50.48, almost the same as its previous close of ₹50.44. At 9:57 AM, the share price of SpiceJet was trading at ₹49.90, down by 1.07% on the BSE.

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