In accordance with the terms of the Irrevocable De-registration and Export Request Authorizations, the Directorate General of Civil Aviation (DGCA) deregistered two Boeing 737s leased to SpiceJet on Thursday (IDERA). The most recent request was made under IDERA, which allows an aircraft owner to have an aircraft de-registered from a third party’s name in situations like default on lease rentals, by two lessors with offices in Dublin, Wilmington Trust SP Services and Aircastle (Ireland).
A SpiceJet spokesperson said that the de-registration of two aircraft “would not impact” the company’s operations without specifying the number of aircraft in its fleet or those that are currently in service. “Although one of (these two) aircraft is grounded for an extended period of time and was scheduled for return sooner, the other is being returned to the lessor due to specific engine problems. Consensually, both aeroplanes are being returned in the best possible way”, he said. In situations like default on lease rents, IDERA mandates that aviation authorities de-register aircraft within five days of the name of a third party.
If any taxes are owed on the aircraft within the allotted time, the DGCA verifies with relevant agencies. The goal is to make sure that deceased airlines or lease defaults won’t cause problems for aircraft lessors when trying to reclaim their jets. At least six aircraft were seized back by lessors under IDERA last year, according to SpiceJet. The low cost carrier had in 2017 ordered 155 Boeing 737 MAX with an option for 50 more. It had 13 B737 MAX when the type was grounded globally in March 2019.
Even though the aircraft started flying again in India and the majority of other nations by late 2021, Boeing has not given SpiceJet even one new MAX in the last four years. To fulfil its needs, the airline leases planes. SpiceJet announced last month that it was in talks with several lessors to do the same after its largest lessor, Carlyle Aviation Partner, opted to convert $100 million in debt into equity shares and compulsorily convertible debentures (CCDs).
According to the company, “All of these CCDs will be transferred to those aircraft lessors who agree to exchange their lease liabilities for an aggregate amount equal to the total nominal value of such CCDs in accordance with the relevant provisions of applicable laws and receipt of applicable regulatory approvals, as may be required,” as part of ongoing restructuring with aircraft lessors Carlyle Aviation Partner (or its affiliated entities) and other lessors. SpiceJet will receive a stake of more than 7.5% from Carlyle. The airline had previously stated that a portion of the debt will also be converted into SpiceXpress CCDs at a future estimated valuation of $1.5 billion (Rs 12,422 crore).