- ICBC-owned entities have filed for deregistration of four Boeing 737 MAX aircraft leased to SpiceJet, marking a step towards repossessing the jets.
- The notices regarding the deregistration were made public by the Indian regulator on Monday, representing a test of a new law aimed at facilitating aircraft repossession.
- SpiceJet stated that the deregistration of the four aircraft will eliminate lease costs on non-operational assets, which have been grounded for a prolonged period due to manufacturing issues.
- The four Boeing 737 MAX jets were grounded due to high-pressure turbine issues in their engines, according to SpiceJet.
- SpiceJet has faced significant operational challenges, including slashing its flight schedule and grounding planes, while also delaying salaries to many pilots.
- Currently, only 11 of SpiceJet's fleet of 53 aircraft are listed as in service, indicating severe operational limitations.
- SpiceJet has received ₹1.5 billion ($15.60 million) from a government-backed credit scheme and is expecting an additional ₹3.5 billion soon.
- Shares in SpiceJet have fallen nearly 63% since the start of the year, reflecting the airline's financial struggles.
China's Industrial and Commercial Bank of China (ICBC) is moving to repossess four Boeing 737 MAX jets leased to SpiceJet, as indicated by recent filings with India's aviation regulator. The two Irish entities involved, Sky High LXXX Leasing Company Ltd and Sky High LXXVIII Leasing Company Ltd, are owned by ICBC Financial Leasing, a subsidiary of the world's largest lender by assets.357
The deregistration requests are a significant test of a new law passed in India last year, designed to facilitate aircraft repossession for lessors. SpiceJet, which has been facing severe operational challenges, has grounded many of its planes and reduced its flight schedule. Currently, only 11 of SpiceJet's 53 aircraft are operational, according to data from Planespotters.net.16
In a statement, SpiceJet acknowledged that the four jets in question had been grounded for an extended period due to manufacturing issues related to the high-pressure turbines in their engines. The airline has also sought financial assistance under a government-backed credit scheme, receiving 1.5 billion rupees ($15.60 million) so far, with hopes of obtaining an additional 3.5 billion rupees soon.
Despite these efforts, SpiceJet's financial situation remains precarious, with its shares plummeting nearly 63% this year. The airline's spokesperson noted that the deregistration would eliminate lease rental costs for non-operational assets, asserting that it would not impact ongoing operations.
“The four aircraft have been grounded for a prolonged period due to high-pressure turbine issues, and SpiceJet says deregistration will eliminate lease costs on non-operational assets. ICBC's move tests a new Indian law making it easier for lessors to repossess aircraft.”
CNBC TV18
