The lawsuit alleges that SpiceJet defaulted on paying rents and other charges for aircraft it leased from two Ireland-based companies.

SpiceJet sued by two firms in LondonImage source: Jonathan Payne via Flickr
Money Legal Saturday, October 10, 2020 - 18:45

Indian low-cost carrier SpiceJet is reportedly facing a lawsuit in London over unpaid dues to the tune of Rs 200 crore, days after it officially announced international long-haul flights to UK. Two Ireland-based companies BOC Aviation and Wilmington Trust Services have reportedly filed a lawsuit with the Business and Property Courts at High Court in London.

The lawsuit alleges that SpiceJet defaulted on paying rents and other charges as per the aircraft lease agreements with the airline and that several notices and reminders were sent to SpiceJet seeking the payment.

SpiceJet reportedly leased three Boeing 737-800 aircraft from BOC Aviation in May 2019 for which it has to pay around Rs 1.6 crore a month per aircraft. These payments have been coming in late since August 2019, Mumbai Mirror reports. As of September 2020, SpiceJet has not paid for the past five months, which amounts to around Rs 29 crore. Including interest and other payments, BOC Aviation has reportedly claimed an outstanding amount of Rs 48 crore.

From Wilmington Trust Services, SpiceJet leased three Boeing 737-Max 8 aircraft in November-December 2018. It hasn’t reportedly paid rent since April 2019. With the outstanding rent, supplemental rent and interest, SpiceJet reportedly owes Wilmington Rs 156 crore.

However, it is to be noted that Boeing 737-Max 8 aircraft have been grounded globally over safety concerns. With SpiceJet being one of the biggest buyers of these aircraft, reports suggest that it is hoping to be compensated for some of the lost profit from Boeing.

SpiceJet reportedly sought a month’s extension to file its reply with the court, which was declined. It has now been asked to file its reply by October 19.

This also comes at a time when the aviation industry has been facing a severe financial crisis with commercial flights being suspended and travel being curbed across the globe due to the COVID-19 pandemic.

PTI also reported last month that dues of IndiGo, SpiceJet, GoAir and AirAsia India to the Airports Authority of India (AAI) have more than doubled between February and July amid the coronavirus pandemic.

For the April-June quarter of FY21 when flight operations were suspended for most part of the quarter, SpiceJet had posted a net loss of Rs 593.4 crore.

SpiceJet announced on October 5 that it will launch non-stop flights connecting Delhi and Mumbai with London’s Heathrow airport starting December 4, 2020 under the air bubble agreement with UK.

The airline will operate thrice-a-week to London including twice from Delhi and once-a-week from Mumbai. “SpiceJet will use an Airbus A330-900 Neo aircraft for these flights. The 371-seater twin-aisle A330 has a configuration of 353 economy and 18 business class seats,” the company said in a statement.  

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