Will settle all dues by September 30: SpiceJet to Delhi High Court

There are only a few airlines left in the country, with Indigo and us (as the low-cost carrier), SpiceJet told the Delhi High Court on Friday, while stressing that it was struggling to stay operational amid a challenging environment in India.

The division bench of the Delhi High Court was hearing SpiceJet’s appeal against a single-bench order grounding the three leased engines from French companies Team France 01 SAS and Sunbird France 02 SAS.

The cash-strapped airline told the court that it will make an additional payment of $1.6 million along with monthly instalments of $1 million by September 30.

The airline's counsel said that as of August 12, there is an admitted default to the extent of $2.67 million towards the outstanding amount and sought an extension of time until September 30 to clear the dues. He also mentioned that they have plans to raise $357 million.

The lessors had filed a case against SpiceJet in December, claiming dues of more than $20 million for the engines.

However, the court criticised the airline, saying that if it had the financial means to pay, the airline wouldn’t be defending itself in court.

“You are using someone else’s property, and you can’t use it without paying the rent. He’s (the lessor) in the business of letting out that property, whether it’s an engine today or a house. Which court allows you to use property without paying?" the court said.

The court also highlighted other mounting troubles for the airline, pointing out its failure to pay salaries to employees.

In the last hearing, the court had told SpiceJet to confirm if their directors would pledge personal guarantees to pay engine lessors for three engines.

"If the company alone is liable and it has no money, then perhaps your directors should provide personal guarantees. Otherwise, it seems the directors themselves have no faith in the money coming in," the court remarked.

Criticising the cash-strapped airline, the court said, "You’ve been repeatedly giving undertakings to the court. If you’re not in a position to pay, then you should ground these engines. Why are you using them if the company is unable to pay?"