Trouble For SpiceJet: Airline Faces Component Theft Charges From Lessors

Three aircraft lessors have issued a legal notice to SpiceJet, alleging that the airline has unlawfully removed parts, including engines, from five Boeing 737 freighter aircraft leased to them. These aircraft were operated by SpiceXpress, the cargo division of SpiceJet.

The lessors — NGF Genesis Ltd., NGF Charlie Ltd., and NGF Alpha Ltd., all based in Ireland — claim that engines have been removed from three of the Boeing 737-700Fs and are now being used on aircraft owned by another lessor that are currently in commercial service, according to the notice sent by law firm Sarin & Co. on Dec. 18, a copy of which was reviewed by NDTV Profit. The other two planes had their APUs or auxiliary power units removed, the notice reads. APUs are essential for providing electrical and mechanical power while an aircraft is on the ground.

The lessors have demanded that SpiceJet either "immediately" return the engines and APUs, or reinstall them. Through the notice, they cautioned that criminal proceedings could be initiated against Ajay Singh, the managing director at SpiceJet, and other directors, for their failure to take action.

SpiceJet has refuted these allegations, labeling them as “baseless and incorrect.”

"SpiceJet currently has only three freighter aircraft from the said lessor, which are grounded due to engine requirements and scheduled maintenance," the airline said in a statement, responding to NDTV Profit's queries. "We are in active discussion with the lessor to return the grounded aircraft to service within the first quarter of 2025. Additionally, we are in advanced discussions with the same lessor for the induction of wide-body and turboprop aircraft into our fleet."

The lessors have already taken two of the five aircraft, which were leased in 2018 and 2019, out of India. They plan to remove the remaining three aircraft due to outstanding payments amounting to $12.7 million.

This situation follows a recent incident in which the Delhi High Court expressed "shock" at a case involving TWC Aviation, which alleged the removal of 16 and 29 parts from two separate aircraft.

In recent years, several aircraft and engine lessors have sought legal action against SpiceJet, aiming for the airline's insolvency due to unpaid debts.

Following a successful fundraising of Rs 3,000 crore through qualified institutional placement in September, SpiceJet said it had managed to settle some disputes with various lessors, including Horizon Aviation, Engine Lease Finance Corporation, Aircastle, Wilmington Trust SP, and Shannon Engine Support Limited, among others.