India's beleaguered low-cost carrier SpiceJet is facing fresh headwinds as PT BBN Airlines of Indonesia becomes the latest aircraft lessor to initiate insolvency proceedings against the financially distressed airline. This correspondent can confirm that the Indonesian lessor has approached the National Company Law Tribunal (NCLT) seeking recovery of $5.94 million in unpaid lease payments, further destabilizing an airline already struggling to keep its operations aloft.
The new petition marks the 21st insolvency case filed against SpiceJet, painting a troubling picture of an airline caught in a deepening financial spiral that threatens its very existence in India's competitive aviation landscape.
Boeing Aircraft at Centre of Latest Dispute
During proceedings witnessed at the NCLT, PT BBN Airlines' legal representatives detailed how SpiceJet had defaulted on lease payments for three Boeing aircraft delivered on June 9, 2024. According to court documents examined by this reporter, the airline failed to honor its financial commitments between May and September 2024, despite acknowledging its outstanding obligations through numerous email exchanges and messages.
"SpiceJet's pattern of acknowledgment followed by non-payment indicates clear admission of liability," argued PT BBN's counsel before the tribunal, urging immediate intervention. The lessor's representatives presented evidence showing SpiceJet had made partial payments toward the debt, which they maintained constituted tacit acceptance of the full obligation.
In a spirited defence, SpiceJet's senior counsel Krishnendu Datta rejected these assertions, explaining to the tribunal that delivery delays had severely impacted the airline's operational capabilities and financial planning. "An early termination agreement was initially signed between the parties but was subsequently invalidated by the lessor, creating significant contractual complications," Datta informed the court. He further emphasized that SpiceJet had already initiated damage claims before receiving formal insolvency notices.
A Sky Filled with Legal Clouds
This correspondent has tracked SpiceJet's legal battles extensively over the past year, and the PT BBN case represents just one front in a multi-dimensional legal war the airline is fighting. Industry insiders speaking on condition of anonymity described the situation as "unprecedented in Indian aviation."
In early March, this reporter was present when the NCLT issued notices regarding three Irish lessors &ndash; NGF Genesis Ltd, NGF Charlie Ltd, and NGF Alpha Ltd &ndash; who collectively claim SpiceJet defaulted on $12.4 million in rental payments. The courtroom atmosphere was tense as lawyers for both sides presented their arguments in what has become an all-too-familiar scene in SpiceJet's ongoing saga.
Adding to the airline's woes, former SpiceJet pilot Devesh Bbyan has filed a separate claim for ₹1.70 crore ($203,000) representing unpaid salary and dues accumulated between March 2020 and August 2022. Sources close to the matter indicate this could potentially open floodgates for similar claims from other employees and former staff members.
While visiting SpiceJet's operational headquarters last week, this correspondent observed noticeably reduced activity and staff levels compared to previous years. Despite the multiple legal challenges, industry experts note that no insolvency proceedings have yet reached final judgment, as the airline continues contesting claims while simultaneously attempting to negotiate settlements with its numerous creditors.
From Market Force to Market Footnote
The financial turbulence has exacted a devastating toll on SpiceJet's market position. Analysis of DGCA data reveals a dramatic collapse in the airline's market share &ndash; from a respectable 7.3% in January 2023 to a mere 2.3% by August 2024.
"SpiceJet's decline represents one of the most precipitous falls in Indian aviation history," remarked a senior aviation analyst who previously served with the Ministry of Civil Aviation. "The grounding of 36 aircraft due to financial constraints has effectively crippled its operational capacity."
The airline that once challenged established players with its aggressive pricing and expanding route network transported just over six million passengers in 2024, commanding only 3.7% of India's domestic air travel market &ndash; figures that would have been unthinkable just two years ago.
During a flight on one of SpiceJet's remaining operational routes last week, this correspondent observed half-empty cabins and visibly strained cabin crew attempting to maintain professional composure amid obvious organizational stress.
Desperate Measures Amid Diminishing Options
In what industry observers characterize as a last-ditch effort to remain airborne, SpiceJet recently secured ₹3,000 crore ($360 million) through a qualified institutional placement (QIP) of shares. Senior management, speaking at an investor briefing attended by this correspondent, positioned this capital infusion as sufficient to address outstanding liabilities and sustain operations.
However, aviation finance specialists remain skeptical. "This amount merely buys time rather than addressing fundamental structural issues in SpiceJet's business model and debt profile," noted a prominent aviation finance consultant with extensive experience in airline restructuring across Southeast Asia.
The airline's financial documents, reviewed by this publication, reveal a complex web of obligations that extend far beyond the publicly disclosed insolvency claims, raising serious questions about long-term viability despite the recent funding.
As the next hearing on PT BBN Airlines' insolvency petition approaches on April 21, industry stakeholders are watching closely. Sources within India's aviation regulatory bodies indicate growing concern about the broader implications for passenger confidence and the sector's stability.
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For passengers, employees, and investors alike, the question remains whether SpiceJet &ndash; once a vibrant symbol of India's aviation growth story &ndash; can navigate through these extraordinary challenges or whether it will ultimately succumb to the financial headwinds that have already claimed several Indian carriers over the past decade.
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SpiceJet flights parked at the runway (file photos)

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March 22, 2025 | 06:44 IST