New Delhi, November 14, 2024: SpiceJet rallied 3.39% to Rs 55.45 after the firm fully settled a $90.8 million (Rs 763 crore) dispute with Export Development Canada (EDC) for a total of $22.5 million, resulting in a substantial saving of $68.3 million (Rs 574 crore).
As per the terms of the agreement, SpiceJet has acquired full ownership of 13 EDC‐ financed Q400 aircraft.
The transfer of ownership of these 13 planes will result in a substantial reduction in operational costs, strengthening the airlines operational capabilities and fleet management. It also brings long‐term financial benefits, relieving SpiceJet from the obligation of monthly rental payments for these aircraft and further reinforcing the airlines financial stability.
This is one of the largest settlements in SpiceJets history, strengthening the airlines fiscal position, removing a significant liability from its balance sheet and paving the way for sustained growth and operational efficiency, the company stated in press release.
The airline added that, These aircraft will also enable SpiceJet to launch additional flights on regional and UDAN routes. Starting 27 October 2024, the airline has begun operating several new routes using the Q400, including Delhi‐Amritsar‐Delhi, Guwahati‐Patna‐Guwahati, Kolkata‐ Patna‐Kolkata, Delhi‐Patna‐Delhi, and Delhi‐Darbhanga‐Delhi.
Recently, SpiceJet also introduced services on the Shivamogga‐Chennai, Shivamogga‐Hyderabad, and Chennai‐ Kochi sectors with the same aircraft. SpiceJet plans to roll out another 18 flights in phases as more Q400 aircraft return to service.
Ajay Singh, chairman and managing director, SpiceJet said, We are very pleased to have paid the settlement amount in full and closed this agreement with EDC. This resolution allows us to move forward with a strengthened balance sheet and focus on getting our Q400 aircraft back into service as quickly as possible. We are excited to expand our regional operations and enhance connectivity across key routes, including those under the UDAN scheme, with our revitalised fleet.
SpiceJet is a low-budget air carrier. The airline operates a fleet of Boeing 737s, Q-400s & freighters and is the country’s largest regional player operating multiple daily flights under UDAN or the Regional Connectivity Scheme. The airline also operates a dedicated air cargo service under the brand name SpiceXpress offering cargo connectivity across India and on international routes according to the reports published in business-standard.com.
The low-cost air carriers standalone net profit declined 26.69% to Rs 149.96 crore on 15.3% fall in revenue from operations to Rs 1,695.52 crore in Q1 FY25 over Q1 FY24.
