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The agreement follows successful arrangements with CFM International, Inc., the OEM for LEAP-1B engines, and the lessor for the 737 MAX aircraft. These developments pave the way for the un-grounding and return to service of three Boeing 737 MAX aircraft by April 2025.
This initiative is a key part of SpiceJet's strategic efforts to restore its fleet, enhance operational capabilities, and support its rapid expansion plans.
As part of the global deal, CFM International will provide material and support services for these LEAP-1B engines for restoration of the engines, underscoring its collaborative partnership with the airline.
This collaboration and restructuring aligns with SpiceJet's robust fleet restoration strategy, which has seen rapid progress. In the past two months, SpiceJet has resolved disputes with multiple prominent lessors, including Export Development Canada, Engine Lease Finance Corporation, Babcock & Brown Aircraft Management, Aircastle (Ireland), Wilmington Trust SP Services (Dublin) Limited, Shannon Engine Support Limited and Genesis.
The settlement with Genesis underscores SpiceJet’s continued commitment to restoring financial stability, achieving operational resilience, and reducing legal liabilities. Subject to the settlement terms being satisfied, both parties have agreed to withdraw all ongoing litigation and disputes related to this matter at the appropriate forums.
This settlement follows a series of successful resolutions with other lessors, including Horizon Aviation, Engine Lease Finance Corporation, Aircastle, Wilmington Trust SP, Shannon Engine Support, and Export Development Canada, among others.
In September 2024, Carlyle Aviation agreed to convert $30 million of lease arrears into SpiceJet equity at Rs 100 per share, signalling increasing confidence from stakeholders in the airline’s financial and operational recovery. The airline's recent financial progress has been recognised by Acuité Ratings & Research Limited, which recently upgraded SpiceJet's credit rating by four notches.
Ajay Singh, Chairman & MD, SpiceJet, said, “This settlement marks another crucial step in our journey towards financial stability. We are pleased to have resolved this matter amicably with Genesis through constructive negotiations. This agreement, which includes Genesis acquiring an equity stake in SpiceJet, will significantly reduce our financial liabilities and further strengthen our balance sheet.”
SpiceJet is a low-budget air carrier. The airline operates a fleet of Boeing 737s, Q-400s, & freighters and is the country's largest regional player operating multiple daily flights under UDAN, or the Regional Connectivity Scheme. The airline also operates a dedicated air cargo service under the brand name SpiceXpress, offering cargo connectivity across India and on international routes.
The low-cost air carrier’s standalone net profit declined 26.69% to Rs 149.96 crore on 15.3% fall in revenue from operations to Rs 1,695.52 crore in Q1 FY25 over Q1 FY24.
Over the past three months, since raising Rs 3,000 crore through a Qualified Institutional Placement (QIP), the airline has cleared all pending statutory liabilities, including Tax Deducted at Source (TDS), Goods and Services Tax (GST), and employee salary dues.
With the airline now current on its statutory dues, it is poised to save significantly on interest payments.
Since October 2024, SpiceJet has been utilising its internal cash flows to meet its statutory obligations, including PF and TDS payments, reflecting the airline's improved financial health and operational discipline.
In addition to clearing its statutory obligations, the company has resolved multiple outstanding disputes with aircraft lessors and other creditors, significantly improving its balance sheet.
Since October 2024, the company has been utilising its internal cash flows to meet its statutory obligations, including PF and TDS payments, reflecting the airline’s improved financial health and operational discipline.
Ajay Singh, chairman and managing director, SpiceJet, said, “We are pleased to announce the clearance of all pending employee PF dues. This marks a new chapter in SpiceJet’s journey. By clearing all pending statutory dues and settling disputes with lessors and creditors, we are demonstrating our unwavering commitment to operational excellence, financial prudence, and the welfare of our employees. With the successful implementation of our financial turnaround strategy, we are confident in our ability to continue delivering superior service to our customers and achieving sustainable growth.”
SpiceJet is a low-budget air carrier. The airline operates a fleet of Boeing 737s, Q-400s & freighters and is the country's largest regional player operating multiple daily flights under UDAN or the Regional Connectivity Scheme. The airline also operates a dedicated air cargo service under the brand name SpiceXpress offering cargo connectivity across India and on international routes.
Both parties opted for an amicable negotiation process, successfully avoiding prolonged courtroom proceedings.
As part of the settlement, all ongoing litigations and disputes between the two parties have been withdrawn from the appropriate forums.
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.
This is one of the largest settlements in SpiceJet’s history, strengthening the airline’s fiscal position, removing a significant liability from its balance sheet and paving the way for sustained growth and operational efficiency, the company stated in press release.
The airline added that, “These aircraft will also enable SpiceJet to launch additional flights on regional and UDAN routes. Starting 27 October 2024, the airline has begun operating several new routes using the Q400, including Delhi‐Amritsar‐Delhi, Guwahati‐Patna‐Guwahati, Kolkata‐ Patna‐Kolkata, Delhi‐Patna‐Delhi, and Delhi‐Darbhanga‐Delhi.
Recently, SpiceJet also introduced services on the Shivamogga‐Chennai, Shivamogga‐Hyderabad, and Chennai‐ Kochi sectors with the same aircraft. SpiceJet plans to roll out another 18 flights in phases as more Q400 aircraft return to service.”
Ajay Singh, chairman and managing director, SpiceJet said, “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 today announced that it has fully settled a $90.8 million (Rs 763 crore) dispute with Export Development Canada (EDC) for a total of $22.5 million, now paid in full by the airline. This resolution marks a significant milestone for SpiceJet, resulting in a substantial saving of $68.3 million (Rs 574 crore).
The agreement represents one of the largest settlements in SpiceJetfs history, strengthening the airlinefs fiscal position, eliminating a significant liability from its balance sheet and paving the way for sustained growth and operational efficiency.
As per the terms of the agreement, SpiceJet has acquired full ownership of 13 EDC] financed Q400 aircraft. The transfer of ownership of these 13 planes will result in a substantial reduction in operational costs, strengthening the airlinefs 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 airlinefs financial stability.
These aircraft will also enable SpiceJet to launch additional flights on regional and UDAN routes. Starting October 27, 2024, the airline has begun operating several new routes using the Q400, including Delhi]Amritsar]Delhi, Guwahati]Patna]Guwahati, Kolkata] Patna]Kolkata, Delhi]Patna]Delhi, and Delhi]Darbhanga]Delhi. Recently, SpiceJet also introduced services on the Shivamogga]Chennai, Shivamogga]Hyderabad, and Chennai-Kochi sectors with the same aircraft. SpiceJet plans to roll out another 18 flights in phases as more Q400 aircraft return to service.
This expansion follows the recent launch of 32 new flights in October 2024, including two international flights connecting Delhi with Phuket.
Last month, the company also commenced UDAN flights linking Shivamogga in Karnataka with Chennai and Hyderabad, and introduced double daily flights between Chennai and Kochi, enhancing connectivity across key regional and metropolitan cities.
Debojo Maharshi, chief business officer, SpiceJet, said, “We are excited to announce the launch of new flights from Jaipur to Varanasi, Amritsar, and Ahmedabad, as well as from Ahmedabad to Pune, providing our passengers with greater flexibility and convenience. These new flights reflect our commitment to supporting passenger demand across tier‐II cities and beyond. With our expanded winter schedule, including international and UDAN routes, we aim to provide our customers with greater convenience, affordability, and seamless travel experiences.”
SpiceJet is a low-budget air carrier. The airline operates a fleet of Boeing 737s, Q-400s & freighters and is the country's largest regional player operating 63 daily flights under UDAN or the Regional Connectivity Scheme. The airline also operates a dedicated air cargo service under the brand name SpiceXpress offering cargo connectivity across India and on international routes.
The low-cost air carrier standalone net profit declined 26.69% to Rs 149.96 crore on 15.3% fall in revenue from operations to Rs 1,695.52 crore in Q1 FY25 over Q1 FY24.
SpiceJet has received a significant boost with Acuite Ratings & Research upgrading its long-term rating by four notches to B+ and its short-term rating to A4. The rating agency has also assigned a ‘Stable' outlook to the airline.
This remarkable four-notch upgrade highlights SpiceJet's sustained efforts towards financial stability, operational resilience, and strategic growth initiatives.
The improved credit rating not only reflects SpiceJet's strengthened financial position but also enhances its ability to secure assets through financial leases, a move that provides the airline with greater flexibility and cost advantages. This step is aligned with SpiceJet's ongoing commitment to expanding its fleet, improving operational efficiency, and delivering enhanced travel experiences to its passengers.