SpiceJet revival plans hit snag as lessors pull out planes

SpiceJet's revival has run into trouble after aircraft leasing companies pulled out the Boeing 737 planes leased to the Indian budget airline.

Currently, SpiceJet has a fleet of 17 Boeing 737s and 15 Bombardier Q400 planes. Last week the airline announced a change in ownership with former director-promoter Ajay Singh stepping in to revive the embattled airline with a promise of bringing in other equity investors.

But even before the transition in management and fund infusion is yet to take place, lessors are terminating the lease agreements of planes given to SpiceJet.

BOC Aviation confirmed that it has terminated the lease of three Boeing 737s it gave SpiceJet and other leasing companies are taking similar steps.

 “We have terminated the leases of three aircraft. It occurred some weeks ago as there were significant arrears. We have requested the Directorate General of Civil Aviation to deregister the planes whose lease agreements have been terminated,'' said David Walton, chief operating officer of BOC Aviation.

Walton added that BOC Aviation is not in discussions with SpiceJet's current or new promoters for continuation of the leases.

BOC Aviation is aircraft leasing arm of Bank of China and owns over 200 planes. The company terminated the leases anticipating further delays in payment of lease rent and is yet to hear from the DGCA regarding its request.

 
"We are in the final stages of ownership change and  recapitalisation. We appreciate the support  and understanding we have received from our partners  and look forward to a long co-operative and mutually beneficial relations with them as we continue on our transformation path,'' said a SpiceJet spokesperson

Ajay Singh who is taking over the reins of the airline had said last week he plans to expand the Boeing fleet size in summer and we are looking at 40-42 planes (current strength is 17). Singh along with other investors are planning to invest about Rs 1500 crore in three tranches.

SpiceJet's Boeing fleet saw a sharp reduction over the last three months with either the airline returning planes or lessors repossessing the aircraft.