SpiceJet expects to restart Boeing MAX service by September-end

India's SpiceJet Ltd said on Thursday it expects Boeing Co's grounded 737 MAX jets in its fleet to return to service at the end of September following a settlement struck with lessor Avolon on leases of the aircraft.

Around 175 countries have allowed the 737 MAX to return to service following a nearly two-year safety ban, with 30 airlines already restarting their MAX aircraft services.

The resumption of MAX aircraft services in India would be subject to regulatory approvals, SpiceJet said. The country's air safety regulator Directorate General of Civil Aviation did not immediately respond to a Reuters request for comment. Avolon declined to comment.

SpiceJet, which said earlier this month it was in discussions with aircraft lessors of MAX aircraft to restructure present leases, did not provide any further details on the settlement https://www.bseindia.com/xml-data/corpfiling/AttachLive/0c9e7a01-f010-42fe-b8ad-e483856d5903.pdf.

With easing of the travel restrictions and increasing pace of vaccinations, there might be some pick-up in air traffic and SpiceJet's settlement to restart MAX aircraft could help it to get back on track, said Likhita Chepa, senior research analyst at CapitalVia Global Research.

"However, higher ATF (Air Turbine Fuel) prices might hurt margins and operability," Chepa added.

With 13 737 MAX planes grounded, SpiceJet, India's second-largest airline by market share and the only one in the country to fly the aircraft, had said it was in talks with Boeing for compensation towards costs and losses it has suffered.

Boeing continues to work with global regulators to safely return the 737-8 and 737-9 to service, the U.S. planemaker said in a statement to Reuters, while declining to comment on the compensation.

The ban followed two crashes five months apart which killed 346 people, plunging Boeing into a financial crisis, which has since been compounded by the pandemic.

SpiceJet has fallen 24.4% this year, as of last close.

(Reporting by Rama Venkat in Bengaluru; Editing by Shounak Dasgupta and Krishna Chandra Eluri)