SpiceJet (SG, Delhi International) has settled a commercial dispute with Dublin-headquartered lessor Goshawk and three of its affiliated entities, allowing the low-cost carrier to add three more Boeing aircraft to its active fleet.

The two companies said in separate statements - Goshawk on August 15 and SpiceJet on August 16 - that the deal, the terms of which are confidential, ends all litigation proceedings between the parties in both Delhi and London.

SpiceJet said that the settlement agreement was with Goshawk and its affiliates Sabarmati Aviation Leasing Limited, Falgu Aviation Leasing Limited, and Wilmington Trust SP Services (Dublin) related to two B737 MAX jets and one B737-800 and that it paves the way for the aircraft to enter into service. Goshawk said it was “pleased to announce that a commercial settlement has been reached for the resumption of flying” of the three leases and that “the parties have agreed to settle all their disputes under and related to the aircraft lease agreements.”

Engagement between the two parties has been ongoing since March 2019, with Goshawk initiating a legal process by issuing a claim on March 6, 2020 at the High Court of Justice in London. No other parties, outside of legal counsel, have been involved in the settlement discussions, Goshawk said.

Goshawk affiliates Sabarmati Aviation Leasing and Falgu Aviation Leasing, formerly known as Sky Aircraft Cassia Two and Sky Aircraft Cassia One, respectively, sued SpiceJet together with Wilmington Trust SP Services (Dublin), a Wilmington Trust Corporation affiliate - acting as trustee for BOC Aviation (Ireland) Limited - for an amount in excess of USD25.6 million in unpaid leases.

The leases relate to B737-800 VT-SZJ (msn 41397) under a contract signed in August 2013 and two B737-8s, VT-MXF (msn 64507) and VT-MXJ (msn 64509), signed for in June 2018. Two of the three are already in active commercial operations, the ch-aviation fleets module shows, while VT-MXF is stored at Mumbai International.

In May 2021, the airline admitted it could not pay the outstanding principal sums, which UK court papers at the time showed as being USD2,464,600, USD11,663,457, and USD11,534,534. The court then urged Goshawk and SpiceJet to mutually mediate as forcing the carrier to pay could result in its insolvency. However, in November a source told the financial daily Mint that, because of the dispute, Goshawk and Wilmington had allegedly tried to block the planned spin-off of the budget carrier’s cargo and logistics business, SpiceXpress and Logistics Private Ltd, to a separate company.

The settlement with Goshawk follows a number of other settlements SpiceJet has struck in recent months with De Havilland Aircraft of Canada, Credit Suisse, Boeing, CDB Aviation, BOC Aviation, and Avolon. But other issues have arisen, for example with AWAS, a subsidiary of DAE Capital.

In separate news, SpiceJet has agreed to settle its dues with City Union Bank, a private sector bank based in Tamil Nadu, in a phased manner that will see repayments taking place until June 2023. The airline paid INR30 million (USD378,000) of the amount it owes the bank last month, and agreed to pay additional INR120 million (USD1.5 million) by the end of August and the remaining INR760 million (USD9.6 million) by June next year, the bank’s chief executive Narayanan Kamakodi said during an earnings call on August 14.