• Sunday, March 03, 2024

Business

Dubai court greenlights SpiceJet to resume operations after seizure

An aircraft from low-cost Indian carrier SpiceJet taxis towards takeoff at the domestic airport in Mumbai on July 15, 2008. US-based fund WL Ross said that it will invest 80 million dollars in struggling Indian low-cost airline SpiceJet. SpiceJet shares surged 4.5 rupees, or 16.1 percent, to an intra-day high of 32.45 rupees (76 US cents) following the announcement, but later retreated to close at 28.5 rupees at the Mumbai stock exchange. The US-based investor is part of global investment manager Invesco, which manages assets for investors in the US, Europe and Asia. Airlines in India, reeling from cut-throat competition in the sector, have also been hard hit by spiralling fuel prices. India has the world’s most expensive turbine fuel prices because of local taxes of up to 30 percent. AFP PHOTO/Sajjad HUSSAIN (Photo by Sajjad HUSSAIN / AFP) (Photo by SAJJAD HUSSAIN/AFP via Getty Images)

By: Pramod Thomas

A recent legal dispute between SpiceJet and lessors over the seizure of an aircraft at Al Maktoum International Airport in Dubai has taken a positive turn for the airline.

The incident unfolded on November 30 when a Dubai-bound SpiceJet flight, SG 15, was diverted to Al Maktoum Airport, where it was subsequently seized by lessors upon landing.

The lessors claimed to have obtained a court order allowing them to repossess the aircraft. However, SpiceJet contested this action, revealing that the Dubai International Financial Centre (DIFC) court had issued a freezing order on October 30, 2023, related to specific engines on the aircraft.

Following a court hearing on Thursday (7), the order was discharged in favour of SpiceJet, the company said.

In response to the court’s decision, SpiceJet said that the aircraft, bearing Indian registration mark VT-SLM, is now free to resume normal operations.

The airline emphasised that there is no DIFC Court order restricting SpiceJet from operating the aircraft, including departing from Al Maktoum International Airport.

Moreover, the judge overseeing the case has directed an inquiry into the losses suffered by SpiceJet due to the court order. The airline will also be reimbursed for the legal costs incurred during this legal episode.

This development comes amid a challenging period for SpiceJet, as the airline faces multiple legal battles. Four aircraft lessors have recently filed insolvency pleas against SpiceJet for non-payment of dues.

Aircastle Ireland Ltd, Willis Lease Corporation, Wilmington, and Celestial are seeking SpiceJet’s admission to the insolvency process, aiming to recover their outstanding payments.

According to estimates from CAPA India, SpiceJet, which has 72 registered aircraft until the end of FY24, with 28 currently operational, is navigating a complex legal landscape as it strives to overcome financial challenges and continue its operations.

(with inputs from agencies)

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