SpiceJet, Boeing settle claims for 737 MAX's return to service

Besides cash, the Indian carrier to get two freighters as part of the deal

SpiceJet will get cash, maintenance support, and two freighters from Boeing after the two sides agreed to settle claims related to the grounding of 737 MAX aircraft, sources said. The amount wasn’t disclosed.

SpiceJet has thirteen Boeing 737 Max aircraft in its fleet and these have been grounded since 2019, following crashes in Ethiopia and Indonesia that killed 346 people. The airline and the US-based planemaker have been in discussions over claims following the grounding, and the settlement pact was announced on Wednesday.

The settlement between SpiceJet and Boeing will now pave the way for the aircraft’s re-entry into operations in India. In August, the Dire­ctorate General of Civil Aviation had allowed the reintroduction of the 737 MAX into service after Boeing incorporated additional safety measures.

“Boeing has agreed to provide certain accommodations and settle the outstanding claims related to the grounding of 737 MAX aircraft and its return to service. This paves the way for the induction of efficient and younger MAX aircraft into SpiceJet’s fleet and ensures the resumption of new aircraft deliveries from our order of 155 MAX aircraft,” the airline said in a stock exchange notification.

Boeing, on the other hand, said: “We are pleased to have reached a settlement that reaffirms SpiceJet’s commitment to the 737 Max aircraft. We look forward to delivering on our commitments to SpiceJet and supporting their operation.”

The two companies did not immediately respond to Business Standard queries regarding settlement details. Sources said the settlement is positive for the airline and a cash component from Boeing would help ease financial challenges faced by the company.

SpiceJet had already booked around Rs 1200 crore in compensation from the US planemaker for groundings in FY20 and FY21, and the same has been treated as other income in its profit and loss statement. The carrier booked other income of Rs 3.7 billion in this calendar year through September 30.