SpiceJet finalises lease agreement for 10 aircraft ahead of summer travel rush, stock rises 9%

SpiceJet finalises lease agreement for 10 aircraft ahead of summer travel rush, stock rises 9%

SpiceJet also said it received three airframes as part of recent settlement agreements, further strengthening its fleet capabilities. These settlements with key aircraft lessors have also resulted in savings of Rs 685 crore for the airline.

Share of the low-cost airlines were trading at Rs 54.63, up by 8.46 per cent, at 2.20 PM.
Business Today Desk
  • Mar 14, 2024,
  • Updated Mar 14, 2024, 2:30 PM IST

Shares of low-cost airline SpiceJet surged in the stock market after the airline said it has finalised lease agreements for 10 aircraft to boost its capacity ahead of the summer rush. 

SpiceJet also said it received three airframes as part of recent settlement agreements, further strengthening its fleet capabilities. These settlements with key aircraft lessors have also resulted in savings of Rs 685 crore for the airline.

"This move underscores SpiceJet's commitment to providing seamless connectivity and enhanced services to its passengers during peak travel seasons. The additional aircraft will enable the airline to meet the growing demand for air travel, particularly during the busy summer months," the airline said in a statement on March 14. 

It noted that on March 7, the airline announced the successful resolution of a $49.8 million (Rs 413 crore) dispute with Echelon Ireland Madison One. The settlement resulted in savings of $48 million (Rs 398 crore) for SpiceJet and the acquisition of two airframes, the firm said. 

Additionally, the airline resolved an $11.2 million (Rs 93 crore) dispute with aircraft leasing firm Cross Ocean Partners, resulting in the transfer of an airframe and an engine to the airline. 

Moreover, SpiceJet and Celestial Aviation, a subsidiary of AerCap, mutually settled their $29.9 million (Rs 250 crore) dispute, resulting in a saving of Rs 235 crore for the airline.

Share of the low-cost airlines were trading at Rs 54.63, up by 8.46 per cent, at 2.20 PM.  

Two days ago, SpiceJet shares plunged nearly 10% after news of two senior executives resignations surfaced. SpiceJet’s Chief Operating Officer (COO) Arun Kashyap and Chief Commercial Officer (CCO) Shilpa Bhatia resigned from the airline, Livemint reported. 

SpiceJet has been facing a cash crunch for the past several quarters. It is also dealing with multiple court cases regarding money owed to former owner Kalanithi Maran, financial services firm Credit Suisse, aircraft lessors, and engine lessors.

On February 22 this year, the airline raised a second tranche of Rs 316 crore under the preferential issue of equity and warrants, which was approved by shareholders in early January. On January 26, the first tranche of Rs 744 crore was infused in the airline. 

On January 11, the airline’s shareholders gave their approval to raise a total of Rs 2,241.5 crore through the issuance of equity and warrants -- Rs 1,591.5 crore by issuing equity to 58 entities and Rs 650 crore by issuing warrants on a preferential basis to five other entities.

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