SpiceJet has issued a dire warning to the Delhi High Court, stating that the airline faces potential “collapse” if forced to meet a looming deadline to deposit ₹144.5 crore. The airline is seeking a review of a previous court order in its protracted legal battle with former promoter Kalanithi Maran and KAL Airways, citing a severe cash flow crisis exacerbated by external geopolitical factors.
A “Systemic” Threat Representing SpiceJet, senior advocate Mukul Rohatgi argued that the airline’s operational stability is currently under extreme pressure. He highlighted that as the smallest of India’s “big three” carriers, any move to attach the company’s accounts for non-payment would lead to a total shutdown.
The airline attributed its financial distress to:
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Geopolitical Conflict: Disruptions caused by the ongoing West Asia conflict have severely restricted profitable flight routes to the Gulf.
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Rising Costs: Surging Aviation Turbine Fuel (ATF) prices have significantly thinned margins and drained cash reserves.
Proposed Alternatives and Government Aid Instead of an immediate cash deposit, SpiceJet offered to furnish a one-acre commercial property in Gurugram as security. The airline requested more time to monetize this asset through real estate firm CBRE, arguing that a forced “crash sale” would only yield 50% of the property’s fair market value.
Furthermore, Rohatgi indicated that the broader aviation sector is expecting a government relief package. This package would reportedly allow airlines to secure loans from PSU banks backed by sovereign guarantees, providing a potential lifeline for the struggling carrier.
The Legal Backdrop The dispute stems from a 2015 ownership transfer. Key milestones include:
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The Original Claim: Maran and KAL Airways infused ₹679 crore into SpiceJet, later alleging that promised warrants and shares were never issued.
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Arbitration Award: In 2018, a tribunal ordered SpiceJet to refund ₹579 crore plus interest.
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Current Debt: While SpiceJet claims to have paid approximately ₹730 crore to date, the court determined in January that ₹144.5 crore remains outstanding.
What’s Next? The Delhi High Court has adjourned the matter until April 15, 2026. The decision will be a turning point for SpiceJet, which is already grappling with insolvency petitions from lessors and intense competition from rivals like Akasa Air and IndiGo.
