SpiceJet, the low-cost airline, has been facing financial hurdles, with a severe cash crunch affecting its ability to meet various payment obligations. One of the biggest challenges has been making payments to aircraft lessors on time. As a result, several lessors approached the Delhi High Court, leading to an order that further escalated the airline’s troubles. Seeking relief, SpiceJet took the matter to the Supreme Court, only to receive a new task from the country’s highest judicial body.
What Did the Supreme Court Say?
The Supreme Court upheld the Delhi High Court’s directive, which had ordered SpiceJet to cease using three of its aircraft engines until payments were made. The apex court rejected SpiceJet’s appeal, stating clearly that the lower court’s decision was justified. “We will not interfere. This is a correct order,” the court observed.
The Chief Justice of India emphasized that failure to comply with the court’s directive would lead to the airline having to return the engines. SpiceJet’s legal team argued that two of the three engines were already non-operational.
The Task Assigned by the Court
In addition to upholding the order, the Supreme Court tasked SpiceJet with reaching out to the lessors over the weekend to resolve the ongoing payment issues. The court’s message was clear: negotiate a settlement or risk losing the engines altogether.
A representative from SpiceJet expressed optimism about reaching an agreement with the lessors. The spokesperson said, “It’s important to note that out of the three engines, two are already non-operational. However, we are in discussions to find a solution.” The airline also assured that its flight operations remained unaffected despite the current situation.
SpiceJet’s Response
During the Supreme Court hearing, SpiceJet indicated that they were prepared to make payments immediately. The airline’s legal counsel further stated, “We are ready to return the engines, but it may take at least a month to arrange the necessary logistics for this.”
Previously, the Delhi High Court had also instructed SpiceJet to ensure that these engines are inspected before further steps are taken. The airline, while navigating through its financial difficulties, aims to comply with the court’s orders but is seeking some additional time to manage the logistics.
SpiceJet Stock Performance
On the same day the Supreme Court’s decision was announced, SpiceJet’s stock took a hit. Its shares, which opened at Rs 68.95 on the Bombay Stock Exchange (BSE) that morning, fell by the day’s end. After briefly climbing to Rs 70.40 during the trading session, SpiceJet shares closed at Rs 66.16, a decline of Rs 2.22 or 3.25% compared to the previous day’s close of Rs 68.38.
While the stock’s performance may reflect concerns about the airline’s financial situation, SpiceJet continues to focus on stabilizing its operations and addressing its commitments to lessors and other stakeholders.
