India’s SpiceJet to own 13 Bombardier Q400 planes after $91m settlement

BENGALURU: Indian budget carrier SpiceJet said on Tuesday it agreed with Export Development Canada (EDC) to settle liabilities worth around $91 million, allowing it to take ownership of 13 of 15 Bombardier Q400 aircraft financed by the Canadian trade finance agency.

The announcement sent the company’s shares up 6.5% in afternoon trade. “This settlement marks the biggest breakthrough in SpiceJet’s financial restructuring efforts to date,” the airline said in a statement. SpiceJet has over the last few months reached settlements with multiple lessors, including Aercap, the world’s largest aircraft lessor, as the company looks to restore its grounded fleet and return to full capacity.

The settlement is also the latest in a series of cost-saving exercises at the cash-strapped airline, which said these would result in savings of $68 million. Last month, it cut jobs saying it would save $12 million annually.

The liabilities were from a loan taken from EDC for the purchase of 15 Q400 aircraft in 2011, the airline said. SpiceJet did not immediately respond to a request for comment seeking details on the settlement amount or the original loan amount.

EDC did not respond to a mail seeking comment outside working hours. As of March, the airline had an operational fleet of 39 aircraft, mostly Boeing 737s, and a few Bombardier Q400 jets.

The airline’s complete ownership of the Q400 jets would let it launch new flights on regional routes, it said. Jet manufacturer Bombardier is a Canada-based firm.