Lessor pushes to repossess SpiceJet aircraft as payment negotiations fail

Aircraft lessor DAE has approached aviation regulator DGCA to deregister three SpiceJet 737 planes

Lessors have approached the aviation regulator DGCA to deregister aircraft of low-cost airline SpiceJet.

The deregistration request filed by leasing firm Dubai Aerospace Enterprise (DAE) against three Boeing 737 aircraft was made after the airline failed to pay lease rentals, documents reviewed by Business Standard showed.

The aircraft - VT-SYW, VT-SYX and VT-SYY were former Jet Airways aircraft which SpiceJet had taken in 2019 after Jet's closure.

The deregistration request has been filed under Irrevocable Deregistration and Export Request Authorisations, or IDERA and is usually filed when payment negotiations between a lessor and airline fail.

After the lessor files a request under IDERA, the DGCA checks if the aircraft has any pending dues from tax authorities and airports, and if none are found, the de-registration is allowed.

The government has been trying to improve ease of doing business for lessors in order to attract them to India. As part of that faster deregistration process by the regulator has been one of the demands from lessors, many of whom are backed by top global banks.

SpiceJet has been facing a cash crunch and has struggled to make payments to vendors leading to a lack of spares, an audit by DGCA found in September last year.

Over the last one month, the airline faced multiple technical snags, forcing the regulator to order the airline to cut its flights by 50 per cent. It has also heightened surveillance on the safety culture of the airline and is doing spot checks on the airline's fleet.

The order, however, will have negligible impact on the business of the airline as it has already been operating flights at less than 50 per cent of its capacity due to lack of funds and lean travel season.