ICBC Moves to Deregister Four Boeing 737 MAX Jets Leased to SpiceJet
By Abhijith Ganapavaram
ICBC Leasing Seeks Deregistration of SpiceJet Aircraft
NEW DELHI, July 13 (Reuters) - Two Irish entities owned by the leasing arm of Industrial and Commercial Bank of China have asked India's aviation regulator to deregister four Boeing 737 MAX aircraft leased to SpiceJet, regulatory documents showed, a step towards repossessing the jets.
Regulatory Notices and Legal Context
The notices, made public by the regulator on Monday, represent a test of a law passed by India last year that was intended to make it easier for lessors to repossess aircraft.
The applications from Sky High LXXX Leasing Company Ltd and Sky High LXXVIII Leasing Company Ltd did not state why they were seeking deregistration.
Ownership and Corporate Background
Corporate records showed the two companies are owned by ICBC Financial Leasing, whose parent is state-owned ICBC, the world's largest lender by assets. ICBC Financial Leasing did not immediately respond to a request for comment.
SpiceJet's Financial Struggles
SpiceJet, India's fourth-largest airline, has slashed its flight schedule, grounded planes, delayed salaries to many of its pilots and sought financing under a government-backed credit scheme to help stabilise its operations.
Government Funding and Financial Aid
The airline has received 1.5 billion rupees ($15.60 million) from the government scheme and hopes to receive another 3.5 billion rupees in the coming days, a source with direct knowledge of the matter said. SpiceJet did not respond to a request for comment about the funding.
Payment Defaults and Lessors' Actions
At least two aircraft lessors have served payment default notices to the airline this year, Reuters also reported.
SpiceJet's Statement and Operational Impact
In a statement, SpiceJet said the four aircraft that ICBC was seeking to deregister had been grounded for a prolonged period because of manufacturing issues related to the high-pressure turbines in their engines.
"The de-registration of these aircraft will eliminate lease rental costs on assets that have remained non-operational for a prolonged period," a SpiceJet spokesperson said, adding that there would be no impact on the airline's operations.
Current Fleet Status
Just 11 of SpiceJet's fleet of 53 aircraft were listed as in service by aircraft-tracking website Planespotters.net.
Market Reaction
Shares in SpiceJet have fallen nearly 63% since the start of the year, while shares in InterGlobe Aviation, the owner of India's biggest airline, IndiGo, are up nearly 1% over the same period.
($1 = 96.1475 Indian rupees)
(Reporting by Abhijith Ganapavaram in New Delhi; Additional reporting by Julie Zhu in Hong Kong and Urvi Dugar in Bengaluru; Editing by Jamie Freed)
