Nunavut Post

Saturday, January 29, 2022

SpiceJet has reached an agreement with De Havilland Aircraft of Canada

agreement with De Havilland Aircraft of Canada

Key Takeaways:

  • Once the settlement terms are met, all legal proceedings will be withdrawn from the UK Court and the Delhi High Court.
  • Domestic carrier SpiceJet has reached a settlement agreement with De Havilland Aircraft of Canada (DHC), and all legal proceedings have been halted to comply.

DHC manufactures the DHC-8-400 aircraft. It filed a lawsuit against the Indian airline in Delhi, seeking payment for an unpaid order for a Q400 aircraft. The manufacturer has now halted the aircraft’s production.

According to a SpiceJet statement issued on December 15, “the parties have agreed to settle all their disputes under also related to the aircraft purchase agreement or component solution agreement, subject to compliance with the terms of the settlement.”

SpiceJet and De Havilland are involved in a dispute over the delivery of 14 Dash 8-400 turboprops that SpiceJet had ordered.

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De Havilland Aircraft of Canada agreement with SpiceJet; Image from Investment Guru India

SpiceJet is anticipated to have inducted a few aircraft from the deal mentioned above as part of the settlement to maintain a long-term relationship with the aircraft manufacturer.

SpiceJet marked a purchase agreement for 25 Q-400 aircraft in 2017. It received five aircraft but failed to make pre-delivery payments for the remaining 15 aircraft on order. It also was unable to accept three of those planes. Later, the contract was terminated by the Canadian aircraft manufacturer.

The issue arose when SpiceJet failed to pay pre-delivery fees for 14 of the aircraft above. As a result, de Havilland sued the low-cost carrier for the same in a UK High Court in February 2020.

In August, De Havilland dragged low-cost carriers to Delhi High Court to enforce a $42.9 million suit decree granted by a UK court.

The new settlement is yet another victory for SpiceJet, which only a month ago reached an agreement with Boeing under which the plane manufacturer agreed to provide “certain accommodations or settle the outstanding argues related to the grounding of MAX 737 aircraft and its service return.”

The DGCA rescinded its order grounding the Boeing 737-8 and 9 models on August 26. Allowing the airline to work the planes in the household market and reach settlement deals with lessors without returning the aircraft.

Aside from that, SpiceJet is embroiled in a legal dispute with its former owner, KAL Airways. SpiceJet’s current chairman, Ajay Singh, purchased the airline following the December 2014 crisis.

Source: moneycontrol

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