SpiceJet shares surged 7% on October 9, following the airline’s announcement of an amicable settlement with Babcock & Brown Aircraft Management (BBAM) for $22.5 million, significantly lower than the initial claim of $131.85 million. By around 10 a.m., the stock was trading at Rs 66.9, reflecting a 6.5% increase from the previous close, as the airline continues efforts to enhance its financial stability and operations.
Ajay Singh, SpiceJet’s Chairman and Managing Director, emphasized that the settlement with BBAM marks a critical step in reducing the airline’s liabilities and strengthening its position. This comes after SpiceJet successfully raised Rs 3,000 crore through a Qualified Institutional Placement (QIP), vital for its financial recovery.
The new capital has helped the airline settle outstanding dues, including Rs 71 crore in Goods and Services Tax (GST) and Rs 80 crore in salary arrears for June to August 2024. Additionally, SpiceJet is set to expand its fleet by adding 10 new aircraft by the end of November, including seven leased and three reintroduced planes.
This fleet expansion follows the resolution of a $16.7 million claim from Engine Lease Finance Corporation (ELFC) on September 24, further addressing the airline’s financial challenges. Despite facing outstanding dues of Rs 3,700 crore in various liabilities, recent developments have positioned SpiceJet for a more stable financial future.
Over the past year, SpiceJet’s stock has generated more than 80% returns, increasing the company’s market capitalization to over Rs 8,000 crore. The airline is also focusing on enhancing connectivity and expanding travel options, including exploring exclusive regional and international destinations to boost revenue as part of its broader growth strategy.
