SpiceJet gets DGCA notices for 4 MAX repossession process

Why SpiceJet is back in the spotlight

SpiceJet is facing a fresh escalation from aircraft lessors as the airline’s payment disputes spill across regulators and courts. A Chinese aircraft and leasing group has written to India’s aviation regulator seeking deregistration of four narrow-bodied Boeing aircraft operated by SpiceJet. Deregistration is a mandatory step before repossession and export of leased aircraft under Indian aviation rules. The Directorate General of Civil Aviation (DGCA) has also published notices linked to the repossession process. Separately, the airline is dealing with insolvency petitions and court-led recovery actions related to unpaid lease rentals and engine dues. SpiceJet has said that the planes involved have been grounded for more than a year and that repossession would not affect its scheduled operations.

DGCA publishes notices under the IDERA mechanism

The DGCA published notices relating to repossession of four aircraft under the Irrevocable De-registration and Export Request Authorisation (IDERA) mechanism. The notices relate to applications seeking deregistration of four Boeing 737-8 MAX aircraft bearing Indian registration marks. The requests were filed by two Dublin-based lessors, Sky High LXXVIII Leasing Co. Ltd and Sky High LXXX Leasing Co. Ltd. These lessors are special purpose vehicles owned by ICBCIL Aviation Co. Ltd. ICBCIL Aviation is a wholly owned subsidiary of ICBC Financial Leasing Co. Ltd, which is wholly owned by the Industrial and Commercial Bank of China (ICBC). The filings mark the start of a formal repossession path for aircraft that are currently grounded.

What triggered the repossession requests

Lessors initiated repossession steps after SpiceJet allegedly failed to pay lease rentals, according to the reporting. The finance leasing arm linked to ICBC filed a request with the DGCA to take back the four Boeing 737 MAX aircraft leased to SpiceJet. A source familiar with the matter also said that at least two aircraft lessors issued payment default notices to SpiceJet this year. The airline has been described as cash-strapped and under sustained financial stress. In this environment, lessors typically move quickly to preserve asset value, especially when aircraft remain grounded for extended periods. The DGCA notices indicate that the IDERA route is being used to enable deregistration and potential export.

SpiceJet’s response and operational context

SpiceJet’s spokesperson said the aircraft have been grounded for more than a year. The spokesperson also asserted that repossession of these planes would not impact SpiceJet’s scheduled flight operations. Separately, the coverage noted that nearly 80% of SpiceJet’s fleet is currently grounded amid the airline’s continued financial woes. That grounding level is central to how investors interpret repossession steps, because fewer active aircraft can constrain capacity and revenue generation. At the same time, SpiceJet’s comment suggests the repossession involves aircraft that are not currently part of the operating schedule. The airline has been operating for 19 years and is currently dealing with multiple financial and legal actions.

The broader legal overhang: UK court order on engine dues

SpiceJet also faced an adverse order from a UK court involving an engine lessor. Reuters reported that London’s Commercial Court mandated SpiceJet pay approximately $1 million to Sunbird France 02 SAS for overdue rent and maintenance fees relating to three engines. The court issued a summary judgment and said SpiceJet lacked a legitimate defense. The overdue rent was reported to have accumulated since January 2022, while maintenance fees trace back to November 2020. The lessor sent default notices in July 2022 and reclaimed three engines later. This episode adds to the pattern of lessors using foreign judgments and enforcement routes to recover dues.

Insolvency petitions at NCLT add pressure

SpiceJet’s shares were expected to be in focus after the National Company Law Tribunal (NCLT) directed three aircraft lessors to submit a valid Power of Attorney by July 3. The direction came in insolvency petitions filed by AWAS 36698 Ireland, AWAS 36694 Ireland, and AWAS 36695 Ireland. These lessors are seeking insolvency proceedings over alleged defaults totalling Rs 77 crore (as reported for April 2024). The tribunal accepted the lessors’ request for time to file updated documents and scheduled the next hearing for July 3. In a separate set of filings, three Ireland-based lessors (NGF Alpha, NGF Genesis, and NGF Charlie) filed petitions under Section 9 of the Insolvency and Bankruptcy Code, claiming dues totalling $12.68 million (about Rs 110 crore).

Part-removal allegations around freighters and court remarks

Another strand involves allegations that parts were removed from leased aircraft. Three Ireland-based lessors (NGF Genesis Ltd., NGF Charlie Ltd., and NGF Alpha Ltd.) issued a legal notice alleging SpiceJet unlawfully removed parts, including engines, from five Boeing 737 freighter aircraft operated by SpiceXpress, the cargo division of SpiceJet. The notice claimed engines were removed from three Boeing 737-700Fs and were being used on aircraft owned by another lessor that were in commercial service. The lessors demanded immediate return or reinstallation of engines and APUs, and warned of potential criminal proceedings against Ajay Singh, the managing director, and other directors if action was not taken within seven working days. SpiceJet refuted the allegations, calling them “baseless and incorrect.” The same coverage said the lessors had already taken two of the five aircraft out of India and planned to remove the remaining three due to outstanding payments of $12.7 million.

Delhi High Court cases and compliance scrutiny

The Delhi High Court issued summons for the CEO and COO of SpiceJet to appear in person over alleged non-compliance with a May 2024 order to pay $1 million to lessor Team France 01 SAS. The order in the matter directed the executives to appear in person on January 16, 2025. Team France 01 SAS and Sunbird France 02 SAS have been pursuing SpiceJet over debts linked to leases of three aircraft engines. Separately, lawyers for TWC Aviation Capital revived a matter where TWC had leased two B737-800s and four CFM engines to SpiceJet, and the court had upheld a UK High Court ruling requiring SpiceJet to stop using the assets and return them. In contempt-related proceedings, TWC’s counsel confirmed the aircraft and engines were returned but alleged one aircraft was returned missing 16 parts and another missing 29 parts, and that the carrier removed parts to use on other aircraft. The judges described SpiceJet’s conduct as “shocking” and indicated they were open to holding the airline in contempt, with the matter listed for January 14, 2025.

Settlements, enforcement actions, and share allotment to lessors

Amid disputes, SpiceJet said it settled a Rs 93-crore dispute with lessor Cross Ocean Partners. The airline also said it mutually settled a Rs 250 crore dispute with Celestial Aviation, with the announcement made before the Delhi High Court in an execution petition. Another lessor, VS MSN 36118 CAY Designated Activity Company, moved the Delhi High Court to execute a UK decree obtained in June 2023, seeking recovery of Rs 90 crore from SpiceJet. The court sought SpiceJet’s response, did not restrain use of the aircraft at that time, and permitted inspection of the aircraft’s maintenance condition. Separately, SpiceJet had previously allotted over 48 million shares to nine aircraft lessors to clear outstanding dues worth 2.31 billion rupees (Rs 231 crore), as the airline sought to return to fuller operations.

Key facts at a glance

Market impact and why the IDERA route matters

The DGCA notices and deregistration applications matter because deregistration is a prerequisite for repossession and export of leased aircraft. The move also comes alongside multiple recovery efforts in India and abroad, including UK judgments and enforcement petitions in Indian courts. Parliamentary passage of a landmark aviation bill last year was described as making it easier for global leasing companies to repossess jets and engines when an Indian carrier defaults. For SpiceJet, which has nearly 80% of its fleet grounded as per the report, any repossession process can shape near-term operational flexibility, even if the airline says specific aircraft are already inactive. For investors, the accumulation of disputes across planes, engines, and alleged parts removal increases the legal and compliance overhang.

What to watch next

Near-term attention will remain on the DGCA’s processing of the IDERA-linked deregistration requests for the four Boeing 737-8 MAX aircraft. Separately, the NCLT is scheduled to hear the AWAS-related insolvency matters again on July 3, after the tribunal asked for valid Power of Attorney documents. In the Delhi High Court, the Team France 01 SAS matter includes a direction for senior SpiceJet executives to appear on January 16, 2025. The TWC Aviation Capital contempt proceedings are listed for January 14, 2025, following allegations of missing parts. Together, these dates provide the next set of checkpoints for creditors, lessors, and shareholders tracking the airline’s ability to close disputes or face enforcement.

Conclusion

SpiceJet is confronting coordinated action by lessors through the DGCA’s IDERA framework, insolvency filings at the NCLT, and enforcement and contempt-related proceedings in courts. The immediate trigger is alleged payment default, but the wider picture includes engine-related dues, aircraft-return compliance, and contested allegations of parts removal. The airline has also pointed to settlements and said the repossession of certain grounded aircraft will not affect scheduled operations. The next developments will hinge on regulator action on deregistration requests and scheduled hearings at the NCLT and Delhi High Court in the coming months.