Indian low-cost carrier, SpiceJet has reached a “commercially agreed” settlement with aircraft lessor, CBD Aviation regarding its Boeing 737 MAX lease agreement. This settlement comes just a couple of weeks after the airline reached a similar agreement with Irish based aircraft lessor, Avolon.
Like many carriers in India, SpiceJet has also incurred significant losses due to the pandemic. Back in August the airline reported a net loss of Rs729 crore (USD$99 million) for the first quarter of this financial year. While some carriers are continuing to struggle financially, the grounding of the 737 MAX has in fact helped SpiceJet.
SpiceJet found itself in a fortunate position that it is now benefitting from the grounding of Boeing 737 MAX. Like many airlines, SpiceJet would have been able to delay or pay reduced lease rental rates during the grounding of the 737 MAX. While it is unclear as to what type of commercial settlement has been agreed upon. Aircraft lessors, such as Avolon and CBD Aviation may have amended their contracts with SpiceJet offering the airline lower maintenance reserve payments or even adding on an additional year to the lease agreement.
The Directorate General of Civil Aviation (DGCA) in India recently lifted the aircraft grounding order for Boeing 737 MAX. This decision will now allow SpiceJet to operate its Boeing 737 Max aircraft which was grounded worldwide following two fatal accidents involving the aircraft type. Initially, SpiceJet and Jet Airways were the operators of Boeing 737 MAX aircraft in India but following the demise of Jet Airways, SpiceJet remains the sole operator of the type in India.
In a company statement, SpiceJet said “This will add to the already announced settlement with Avolon and grow its fleet of 737 MAX aircraft. The airline expects to start operations of MAX aircraft around the end of September 2021, subject to regulatory approvals.”
With the government of India lifting the ban on Boeing 737 MAX, SpiceJet hopes to use these new-generation more fuel-efficient aircraft to make the airline profitable. SpiceJet also recently announced that it will start 38 new domestic and international routes from September 15th-25th, and is a sign of revival for the airline.
Chairman and managing director of SpiceJet, Ajay Singh said, “SpiceJet will be connecting Visakhapatnam with Mumbai, Udaipur with Chennai, and Delhi with Male for the first time, and we expect these routes to do very well.” With the festive season right around the corner in India, SpiceJet wants to utilize this opportunity to return a second-quarter profit.
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Source: https://aeronewsx.com/spicejet-reaches-settlement-with-its-boeing-737-max-aircraft-lessor/
