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SpiceJet is poised to receive a Q400 aircraft secured from Nordic Aviation Capital (NAC) as part of a settlement agreement inked last year.

Under the agreement, which settles all past liabilities for the Q400s leased by NAC to SpiceJet, the airline acquires full ownership of six Q400s. The airline already has five Q400 aircraft which were earlier owned by NAC. The ownership of these planes has been transferred to SpiceJet. This agreement also heralds immense long-term savings for SpiceJet, liberating the airline from the obligation of regular monthly rentals for these aircraft.

The sixth Q400 aircraft is en route to India from Germany and is expected to arrive in Delhi soon.

The timely arrival of the Q400 aircraft aligns with the upcoming summer schedule, enabling the airline to offer seamless connectivity and enhanced services to passengers during peak travel seasons.

SpiceJet has recently announced four major settlements with key aircraft lessors, resulting in substantial savings of Rs 1252 crore for the airline.

On 26 March 2024, SpiceJet announced a significant settlement with Export Development Canada (EDC), securing full ownership of 13 EDC-financed Q400 aircraft. This comprehensive agreement resolved liabilities amounting to nearly $91 million, as per SpiceJet's records, leading to substantial savings of Rs 567 crore for the airline.

In addition to the EDC settlement, SpiceJet finalized three other noteworthy agreements, including those with aircraft leasing firms, Cross Ocean Partners and AerCap. These settlements collectively yielded savings of Rs 685 crore for the airline. Moreover, SpiceJet acquired three Boeing aircraft as part of these agreements.

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SpiceJet and Export Development Canada (EDC) have signed a settlement agreement, the terms of which will allow the airline to clear major liabilities, leading to a comprehensive revitalization of its balance sheet. This settlement marks the biggest breakthrough in SpiceJet's financial restructuring efforts to date.

Under the agreement's terms, SpiceJet will acquire full ownership of 13 EDC-financed Q400 aircraft, bolstering the airline's operational capabilities and fleet management. This pivotal agreement marks a significant milestone in SpiceJet's pursuit of financial stability, demonstrating its commitment to prudent financial management and long-term prosperity.

As part of the settlement, SpiceJet will pay a comprehensive settlement amount to resolve outstanding liabilities amounting to close to $91 million as per SpiceJet books of accounts. This settlement not only alleviates SpiceJet of a substantial financial burden but also lays the groundwork for a fortified balance sheet and substantial savings for the airline.

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The company said that the terms of the agreement will allow the airline to clear major liabilities, leading to a comprehensive revitalization of its balance sheet.

Under the terms of the agreement, SpiceJet will acquire full ownership of 13 EDC-financed Q400 aircraft, bolstering its operational capabilities and fleet management.

As part of the settlement, the low-cost air carrier will pay a comprehensive settlement amount to resolve outstanding liabilities amounting to close to $91 million as per SpiceJet books of accounts.

This settlement not only alleviates SpiceJet of a substantial financial burden but also lays the groundwork for a fortified balance sheet and substantial savings for the airline, it added.

Further, the company stated that the settlement to generate savings of Rs 567 crore ($68.3 million).

Ajay Singh, chairman and managing director of SpiceJet, said, “This significant milestone will allow us to strengthen our balance sheet and position the airline for long-term success.”

The liabilities stem from a loan acquired by the airline in 2011 for the procurement of 15 aircraft. With twelve of these Q400s currently grounded, their refurbishment and subsequent return to service will enable SpiceJet to promptly launch flights on numerous regional and UDAN routes, the company stated in the press release.

“This agreement heralds immense long-term savings for SpiceJet, liberating the airline from the obligation of regular monthly rentals for these aircraft. The accord with EDC represents a substantial boost for SpiceJet, reaffirming its resilience and determination to surmount financial challenges and emerge as a vastly stronger entity in the Indian aviation landscape”, it added.

SpiceJet operates as an Indian airline with a focus on providing affordable and accessible travel options for a wide range of Indian passengers. The company holds IATA-IOSA certification and manages a fleet comprising Boeing 737s, Q-400s, and freighters.

The low-cost air carrier’s consolidated net loss narrowed to Rs 448.99 crore in Q2 FY24 as compared with a net loss of Rs 833.32 crore in Q2 FY23. Revenue from operations slipped 29% year on year to Rs 1,347.52 crore in the quarter ended 30 September 2023.

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SpiceJet has finalised a significant lease agreement to introduce two wide-body A340 aircraft into its fleet for the upcoming Haj operations. This strategic move underscores the airline's commitment to delivering exceptional travel experiences while maximizing revenue streams.

The airline will deploy the wide-body aircraft from both Srinagar and Guwahati.

Last year, SpiceJet's Haj operations generated substantial revenue of Rs 337 crore. The airline aims to replicate this success in the current year's operations.

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