Gurugram, India: India’s low-cost carrier SpiceJet has told the Delhi High Court that it faces a serious risk of operational collapse if compelled to immediately deposit ₹144 crore ($17 Million) in an ongoing legal dispute with former promoter Kalanithi Maran and KAL Airways, intensifying concerns over the airline’s fragile financial position.
During recent proceedings, SpiceJet informed the court that enforcing the ₹144 crore ($17 Million) payment order at short notice would severely strain its already limited liquidity, potentially disrupting day-to-day operations. The airline sought additional time to arrange funds, arguing that an immediate payout could destabilize its financial structure and impact flight operations.
The dispute stems from a long-running arbitration case linked to a 2015 share transfer agreement between SpiceJet and Maran. While the airline maintains it is entitled to eventual refunds after the legal process concludes, courts have continued to press for compliance with interim payment directives.
Earlier, the Supreme Court of India declined to stay the deposit order, effectively escalating pressure on the airline to secure funds.
Adding to its troubles, a UK court recently directed SpiceJet to pay approximately around ₹66 crore ($8 million) to an engine leasing company over unpaid dues related to maintenance reserves and rent dating back to 2020-2022. The ruling highlights the airline’s growing exposure to international liabilities and creditor actions.
SpiceJet’s financial condition has remained under scrutiny, with auditors flagging “going concern” risks in recent assessments. The airline continues to grapple with high debt levels, negative net worth, and persistent losses.
Industry data indicates that only a portion of its fleet is currently operational, limiting revenue generation capacity. The airline’s market share has also eroded significantly in recent years, as larger competitors consolidate dominance in India’s domestic aviation sector.
In an attempt to improve liquidity, SpiceJet has initiated efforts to sell non-core assets, including land holdings in Gurugram, reportedly through a structured sale process. However, the court did not accept these assets as immediate security against the payment obligation, emphasising the airline’s lack of readily available cash reserves.
The airline’s challenges are further compounded by rising aviation turbine fuel (ATF) prices and operational disruptions linked to geopolitical tensions in West Asia, which have forced route adjustments and increased fuel burn. These factors have added to cost pressures at a time when the airline’s balance sheet remains under strain.
