SpiceJet (SG, Delhi International) wants to reboot a dormant B737 MAX order, according to Managing Director Ajay Singh. The carrier simultaneously faces a new lessor dispute after lawyers for Spectre Air Capital have accused it of theft by removing engines from leased B737-700(BDSF)s.

Speaking at the airline's annual general meeting on December 30, 2024, Singh said it was important for SpiceJet to rebuild its capacity to compete against bigger carriers and provide consumers with choices in the Indian market.

“We will restart our talks with Boeing. We received thirteen [B737-8 aircraft], and we will talk with the company to restart deliveries. Hopefully, we can do this in the upcoming months," Singh said.

In early 2017, the Indian low-cost carrier placed a firm order with the manufacturer for 100 B737-8s with options for 50 more directly. Including two earlier contracts, the carrier's commitment for the type reached 155 units. However, SpiceJet only took delivery of 13 before financial difficulties forced the airline to stop deliveries. However, it returned six of these aircraft to the lessors (SMBC Aviation Capital, Avolon, and CDB Aviation) in 2023 and 2024. The aircraft were later redelivered to Enter Air and SmartLynx Airlines Malta, the ch-aviation fleets module shows. The remaining seven are leased from CDB Aviation (three), BOC Aviation (three), and AerCap, and have all been parked since mid-2024.

However, Singh also told the meeting that SpiceJet intended to reactivate thirty grounded aircraft over the next 12-15 months. In early December 2024, SpiceJet signed an agreement with US-based MRO company StandardAero to help unground the B737-8 fleet. At least three aircraft are expected to return to the air by April 2025.

The airline has 129 B737-8s remaining on firm order from Boeing.

Besides the seven B737-8s, the carrier presently has 29 other aircraft on the ground, including two B737-700s, three B737-700(BDSF)s, seven B737-8s, five B737-800s, two B737-900ERs, and eighteen DHC-8-Q400s. The groundings are due to recurring issues, including lease defaults and parts shortages, and leave SpiceJet with an active fleet of only 18 in-house aircraft.

Singh said SpiceJet wanted to have a fleet of 100 aircraft by the end of 2026, up from the current 27 operational aircraft (which includes nine wet-leased aircraft). He said India needed strong airlines to compete against Air India (AI, Delhi International) and IndiGo Airlines (6E, Delhi International) and prevent the market from becoming a duopoly.

SpiceJet recently raised INR30 billion rupees (USD351 million) via a qualified institutional placement. Around INR8 billion (USD93.6 million) will go towards ungrounding and upgrading the fleet.

Engine theft allegations

Meanwhile, in a sharply worded letter obtained by The Economic Times, specialist aviation law firm Sarin & Co, representing Spectre Air Capital, said SpiceJet has engaged in serial misconduct concerning the leases of B737-700 freighters by removing their engines.

"It must be pointed out that you didn't seek the approval of my clients before taking (the) aforementioned actions, and neither have you paid for the use of my clients' high-value equipment and continue to use the equipment without remunerating my clients for the same," the letter reads. "Therefore, prima facie, you are inter alia guilty of theft."

Spectre has leased three B737-700(BDSF)s to SpiceJet through assorted special purpose vehicles, specifically VT-SFB (msn 29042) through NGF Genesis Ltd, VT-SFE (msn 29084) through NGF Charlie Ltd, and VT-SFD (msn 30512) through NGF Alpha Ltd. All three freighters are in storage in India.

ch-aviation is informed that CFM International CFM56-7B22 engines bearing the serial numbers 877523 and 888126 were removed from VT-SFE and engine 888115 was removed from VT-SFD.

SpiceJet is reportedly working to return the three aircraft to service in the first quarter of 2025. The airline told the newspaper it was also in talks with Spectre about leasing additional aircraft. SpiceJet did not respond to a request for comment.

After recently raising INR30 billion rupees (USD351 million), SpiceJet has resolved multiple lease disputes, including most recently paying USD4 million to Genesis Leasing to settle a USD16 million case. Other recent settlements have involved Horizon Aircraft Finance, Engine Lease Finance Corporation, Aircastle, Wilmington Trust SP Services (Dublin), Shannon Engine Support Limited, and Export Development Canada. However, several more lease disputes remain active and before the court.