'Engine leased to SpiceJet unserviceable now' lessor tells Delhi High Court

Lessor alleges that engine is unserviceable

Engine Lease Finance BV, a lessor to low-cost airline SpiceJet, on January 24 told the Delhi High Court that an engine it had leased to the airline is currently in an unserviceable condition.

The lessor's statement came after it inspected the engine upon its grounding by SpiceJet. Engine lease claimed that the engine, which is currently in SpiceJet's possession is not being maintained as per Boeing's aircraft manual, thereby causing harm to expensive equipment. The lessor claimed that the engine is now not capable of being redelivered to them in Europe.

SpiceJet denied these allegations and argued that the engine's condition had deteriorated due to wear and tear and it was not in the unserviceable condition as claimed by the lessor. SpiceJet further told the court that they will respond to these allegations by filing a response to the lessor's application.

The court accordingly granted time to SpiceJet to file a response and the lessor to file a rejoinder to the response. The case is now likely to come up for a hearing on February 12.

On January 16, the high court permitted the lessor to inspect an engine it had leased to the low-cost airline.

The inspection was to be carried out once at the time of grounding of the engine and once at the time of its re-delivery.

Engine Lease Finance BV moved the court in December, alleging that the low-cost airline had failed to make payments as agreed.

The lessor had alleged that SpiceJet only paid a part of the money and was yet to make complete payments as was agreed in October. The court said the airline couldn’t go back on its words and asked SpiceJet to file an undertaking to pay.

In October, the lessor and SpiceJet arrived at an interim settlement. The engine lessor agreed not to pursue the stay application against the airline.

Engine Lease Finance had moved the court stating that they had terminated its lease with SpiceJet and the airline had returned eight of its nine engines. As per the agreement, the airline cannot continue using the engine once the lease is terminated. The lessor sought the court's order to restrain SpiceJet from using its engine.