SpiceJet, one of India’s leading airlines and a low cost airline, has now signed a settlement agreement with Export Development Canada (EDC). This agreement allows the airline to clear major liabilities that amount to USD 91 million (Rs 755 crore), as per SpiceJet’s account of purchases.
According to the official statement from the company and airline, as part of the settlement, the airline will be able to acquire the full ownership of about 13 EDC-financed Q400 aircraft and bombardier aircraft, marking a strategic move to bolster its operational capabilities in regional market and fleet management.
This acquisition is not only strengthening the airline’s position in the aviation market but it also generates a substantial savings of USD 68.3 million (INR 567 crore) for the airline in the future which is very important thing to accomplish.
Ajay Singh, who is the Chairman and Managing Director of SpiceJet had expressed his satisfaction with the agreement, with specially emphasising its significance in strengthening SpiceJet’s balance and positioning the airline mogul for long-term success, especially after a huge hit during COVID . Ajay Singh had also acknowledged EDC’s cooperation and progressive approach throughout the negotiation process.
The liabilities that were addressed in the settlement stem from a loan acquired by SpiceJet in 2011 an approximate 13 years ago for the procurement of 15 bombardier aircraft. With twelve of these Q400s currently grounded, their refurbishment and subsequent return to service will enable SpiceJet to swiftly launch flights on various regional and UDAN routes especially from tier 3 airports, enhancing its operational efficiency and market presence and boosting regional connectivity in India
Furthermore, the agreement frees the company from the obligation of regular monthly rentals for these aircraft
What does this mark for SpiceJet?
The negotiation with EDC marks a significant milestone for SpiceJet, this is reaffirming its resilience and determination to overcome financial challenges and emerge as a stronger player in the Indian aviation industry after COVID.
