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SpiceJet shares were in the spotlight after a UK court asked the airline to pay around $8 million, or about ₹70 crore, to an aircraft engine leasing company.
However, the stock managed to end in the green on Friday and had rallied sharply recently, hitting upper circuits in the previous two sessions.
What’s happening: a London court has ruled in favour of Sunbird France, an aircraft engine leasing company, asking SpiceJet to pay its pending lease and maintenance dues. The airline didn’t even contest the case despite multiple chances.
These dues go back a while, with unpaid rent since early 2022 and maintenance costs from as far back as 2020. The lessor had already taken back three engines between 2022 and 2023 after issuing default notices.
The lessor is now likely to approach Indian courts to enforce the order, which could increase financial pressure on the airline.
The headwinds: this comes at a time when SpiceJet is already under financial stress, with ongoing losses and more debt than assets.
The company hasn’t been doing well, with sales falling over the past five years. Promoters own a relatively small stake, and nearly half of it is pledged. It also has potential liabilities of ₹806 crore, and a big chunk of its earnings comes from other income rather than core business.
The airline has been struggling since the Boeing 737 MAX grounding and COVID-19, and is also losing market share to rivals like Akasa Air.
