SpiceJet seeks to speed up delivery of new Boeing aircraft

Budget airline SpiceJet Ltd, even as it struggles to keep lessors from taking back aircraft, has initiated talks with Seattle-based Boeing Company to advance the delivery of the 40 Boeing 737-MAXs it had ordered in January last year.

Sanjiv Kapoor, chief operating officer of the airline, said the delivery of the B737-MAX was to begin from 2018 but the airline was looking at whether it could be shifted forward by a year to 2017.

"The net increase in our fleet size during the peak season (summer) will be seven aircraft which will include 4-8 aircraft on dry lease and three on wet lease. We are also trying to advance the delivery of B737-MAXs from 2018 to 2017," he said.

A senior executive of the airline said advancement of the delivery would be done on payment of a "premium" over the list price of aircraft. The airline's order for 40 of the Boeing planes was worth $4 billion at list price.

Kapoor said the three Boeings on wet lease will be returned by June and the current Boeing fleet of 17 would be expanded to 35 by the end of the current year.

On Wednesday, the airline informed the Bombay Stock Exchange that BBAM Aircraft Leasing and Financing's five special purpose vehicles (SPVs) had withdrawn the winding up petition against it in the Madras High Court.

It said this was done after the airline entered into an in-principle agreement with the five lessors B&B Air Acquisitions Leasing, Steddel, Torodell, Xavier Dell and Virgodell.

"Under the said understanding, the lessors have agreed to suspend court proceedings (including winding-up proceedings) and deregistration process of aircraft subject to SpiceJet satisfying the terms of settlement and parties executing definitive agreements," said the statement issued by the airline to the stock exchange.

Kapoor said with this settlement with the lessor, SpiceJet had resolved disputes with almost all the lessors for 11 aircraft.

"Now they (the five lessors) will be writing to directorate general of civil aviation (DGCA) to not de-register our aircraft. We have already settled dispute on three aircraft with BOC Aviation (BOCA) and are in talks with Ansett Worldwide Aviation Services (AWAS) for three aircraft. With this, all our issues with the lessors will be cleared," he said.

The Gurgaon-based low-fare airline's net dues owed to the lessors stands at Rs170 crore, after settling the dues of "friendly" lessors.

According to Kapoor, the problems with lessors were legacy issues, which had crept up when the operations of the airline were in the hands of the former promoters.

The original owner of the SpiceJet Ajay Singh took control of the airline after buying out the 58.4-per cent stake of Kalanithi Maran and his family. He has infused around Rs1,000 crore in the airline till now and is scouting for investors to recapitalise the airline, which is starved for funds.

Kapoor said the airline has met all its obligations like taxes and pending employee salaries from the funds brought in by Singh and cash flow generated from the operations.

He said with budget airline's operations back on the runway, it will soon begin recruitment of pilots.

More than 100 pilots had left SpiceJet due to natural attrition when its fleet size was cut to half in December last year, when it was unable to operate all its aircraft. However, now with the airline increasing its flights and bringing in new aircraft, many pilots who had put in their resignation were withdrawing it.