SpiceJet on Thursday 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, it added, 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 SpiceJet’s history, strengthening the airline’s fiscal position. This eliminated a significant liability from its balance sheet.
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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.”
Ownership of 13 Q400 will reduce operational costs
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 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,” it said in a statement.
These aircraft will also enable SpiceJet to launch additional flights on regional and UDAN routes.
SpiceJet has cleared over Rs 600 crore in pending dues starting September 26, 2024. Additionally, the company has also reached settlements with multiple aircraft lessors.
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