In a fresh development in SpiceJet’s financial challenges, Eusu Logistics India Pvt. Ltd, the Indian arm of the South Korea-based Eusu Logistics, has filed an insolvency petition against the low-cost carrier in the National Company Law Tribunal (NCLT). This legal action has been taken over an alleged unpaid amount of ₹1.94 crore for freight services provided by Eusu Logistics. Despite the significance of the case, the tribunal did not issue a formal notice due to the absence of the lawyer representing Eusu Logistics during the initial hearing. The tribunal has postponed the hearing to November 26, when it will resume consideration of the plea.
This insolvency petition follows another major legal action faced by SpiceJet, as aircraft lessor Falgu Aviation Leasing Ltd filed a separate plea on Thursday, accusing SpiceJet of defaulting on a payment amounting to $8.1 million, approximately ₹68 crore. In this instance, the NCLT did issue a notice to SpiceJet, highlighting the airline’s ongoing financial disputes and its complex challenges in managing creditor settlements.
These legal proceedings come as SpiceJet, one of India’s prominent budget airlines, faces substantial financial pressure from various creditors. Amid these challenges, SpiceJet has been actively seeking settlements with creditors and exploring ways to resolve outstanding debts, yet the mounting petitions for unpaid dues underscore the airline’s financial hurdles.
The financial strain on SpiceJet stems from multiple factors, including the broader impact of global economic volatility on the aviation industry, fuel price fluctuations, and the lingering effects of the COVID-19 pandemic. As a low-cost carrier, SpiceJet has faced unique challenges in maintaining profitability amid rising operational costs and stiff competition in the Indian aviation market.
In response to these mounting financial pressures, SpiceJet has been making efforts to restructure its debts, raise additional capital, and negotiate with creditors to find mutually agreeable solutions. However, the legal filings by creditors like Eusu Logistics and Falgu Aviation Leasing indicate that some parties are growing increasingly impatient with the ongoing delays in payments. These legal challenges may complicate SpiceJet’s efforts to achieve financial stability, and the outcomes of these cases in the NCLT will be closely monitored by the industry.
SpiceJet’s situation also highlights broader concerns within the Indian aviation sector, where multiple airlines face similar pressures, though on different scales. The challenges faced by SpiceJet and other carriers underscore the need for resilient financial strategies and strong regulatory support to ensure the sustainability of India’s aviation industry. With upcoming court hearings and the potential for further creditor actions, the future remains uncertain for SpiceJet as it navigates a turbulent financial landscape. The NCLT proceedings in November will shed more light on the airline’s ability to resolve these issues and retain its foothold in the competitive Indian aviation market.
