SpiceJet, Boeing settle 737 MAX Claims
In a submission to BSE, SpiceJet stated that Boeing agreed to provide specific accommodation and resolve outstanding claims related to the landing and restart of 737 MAX aircraft. The settlement agreement was notified to the stock exchange on 17 November.
Boeing agreed to provide unresolved claims with specific accommodation related to the landing of 737 MAX aircraft and return to service.
It is stated that the agreement will open the way for more efficient and younger MAX aircraft to be introduced into the SpiceJet fleet and guarantees that orders for 155 MAX aircraft will resume delivery of new aircraft.
On September 13, it was announced that it had settled with CDB Aviation, the main lender of the Boeing 737 Max aircraft, and on August 26, it announced that it had settled with another major lender of the aircraft, Avalon.
In a statement, the low-cost carrier stated that it would begin operating MAX aircraft around the end of September 2021, subject to regulatory approval. At this time, only the airline SpiceJet has a Boeing 737 Max in its Indian fleet.
The deal will allow SpiceJet to induct efficient and younger MAX aircraft into its fleet, and ensure resumption of deliveries of the 155 MAX aircraft it had ordered
India lifts ban
The Director of Civil Aviation (DGCA), India's aviation regulator, lifted the ban on the commercial operation of Boeing 737 Max aircraft almost two and a half years later.
On March 13, 2019, all Boeing 737 Max aircraft were canceled by DGCA in India after the crash of an Ethiopian Airlines-operated 737 Max aircraft on March 10.
Since being ordered by the Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency (EASA) last October and November, it has been "carefully monitoring global trends in ground contact" for 737 Max aircraft.
According to the Indian Aviation Authority, a total of 34 airlines around the world flew 1.22 lakh flights with 345 Max aircraft because the aircraft did not land at the end of last year. Boeing 737 Max-Aircraft are permitted in India “only after complying with applicable re-commissioning requirements".
Company performance
The airline expects 737 MAX to return to the skies in the current quarter.
SpiceJet Ltd cut down its net loss to ₹561 crores for the September quarter. It posted a loss of ₹729 crores in the June quarter and ₹112 crores in the September 2020 quarter.
The revenue from operations increased by 23% to ₹1,342 crores for the quarter against ₹1,089 crores in the June quarter.
Total expenditure increased from Rs. 1405.60 crore to Rs. 2100.40 crore as compared to the second quarter of 2020-21. The company reported a net loss of Rs. 729 crore in the first quarter of the current fiscal year.
What's Next?
The settlement and reintroduction of the 737 MAX aircraft will help the company to fight the emerging competition in the Indian aviation industry.
"With the nationwide vaccination drive growing at an unprecedented pace across geographies, there is a significant jump in travel demand and we are very excited about the demand recovery," Ajay Singh, Chairman and Managing Director, SpiceJet, said.
by Nisaar Khan