SpiceJet clears $90.8 million EDC debt, secures full ownership of 13 planes

As part of the settlement, SpiceJet has acquired full ownership of 13 Q400 aircraft previously financed by EDC

SpiceJet announced on Thursday that it has fully settled a $90.8 million (Rs 763 crore) dispute with Export Development Canada (EDC) by paying a reduced amount of $22.5 million (Rs 189 crore). The low-cost carrier reported savings of $68.3 million (Rs 574 crore) as a result of the settlement.

 

As part of the agreement, SpiceJet now holds full ownership of 13 Q400 aircraft previously financed by EDC. The airline stated that outright ownership of these planes would significantly cut operational costs, enhance fleet management, and bolster financial stability by eliminating monthly rental payments.

 

“The transfer of ownership of these 13 planes will result in a substantial reduction in operational costs, strengthening the airline’s operational capabilities and fleet management. It also brings long-term financial benefits, relieving SpiceJet from the obligation of monthly rental payments for these aircraft and further reinforcing the airline’s financial stability," the airline said in a statement.

 

 

Ajay Singh: Focus on financial health and regional growth

 

Ajay Singh, Chairman and Managing Director of SpiceJet, remarked, “We are very pleased to have paid the settlement amount in full and closed this agreement with EDC. This resolution allows us to move forward with a strengthened balance sheet and focus on getting our Q400 aircraft back into service as quickly as possible. We are excited to expand our regional operations and enhance connectivity across key routes, including those under the UDAN scheme, with our revitalised fleet."

 

SpiceJet's financial restructuring

 

The settlement is part of SpiceJet’s broader financial restructuring plan. In September, the airline raised Rs 3,000 crore through a Qualified Institutional Placement (QIP), which was oversubscribed, attracting 87 domestic and international investors.

 

Since September 26, 2024, SpiceJet has cleared over Rs 600 crore in pending dues, including outstanding salaries, Goods and Services Tax (GST) liabilities, Provident Fund (PF) contributions, and settlements with aircraft lessors. By October 29, 2024, the airline had also cleared Rs 310 crore in pending Tax Deducted at Source (TDS) payments, including Rs 220 crore owed to employees for the period between April 2020 and August 2023.

 

SpiceJet’s operational expansion

 

SpiceJet is ramping up its operations, introducing 32 new flights under its winter schedule, which began on October 27, 2024. This includes 30 domestic flights and two international routes offering non-stop daily service between Delhi and Phuket.

 

Under the UDAN scheme, the airline has launched new flights connecting Shivamogga in Karnataka with Chennai and Hyderabad, along with double daily flights between Chennai and Kochi.