SpiceJet shares rally 6% as Echelon Ireland Madison One settlement to save Rs 398 crore

Shares of SpiceJet Ltd climbed 6 per cent in Thursday's trade, as the airline said it has resolved a Rs 413 crore ($49.8 million) with Echelon Ireland Madison One, resulting in substantial cost savings and strengthening of the its balance sheet. SpiceJet said the settlement with Echelon Ireland Madison One would result in savings of $48 million (Rs 398 crore) for SpiceJet aviation company.

The settlement marks the third major resolution for SpiceJet following its recent fundraising. These successful settlements have resulted in total savings of Rs 685 crore for the airline, "further solidifying SpiceJet's financial stability and balance sheet".

As part of the agreement, SpiceJet will acquire two airframes, enhancing the airline's fleet and operational capabilities. On March 5, SpiceJet had reached settlement terms with aircraft leasing firm, Cross Ocean Partners, resolving a dispute of about $11.2 million (Rs 93 Crore). As part of that arrangement, the airline would benefit from the transfer of an airframe and
an engine at no additional cost. Also, on February 28, SpiceJet mutually settled its $29.9 million (Rs  250 crore) dispute with Celestial Aviation, resulting in savings of Rs 235 crore.
 
Following the fresh development, SpiceJet shaes climbed 5.62 per cent to hit a high of Rs 65.40 no BSE. With this, the stock has cut its one-month losses to 10 per cent. The scrip is up 58 per cent in the last six months.

Chairman and Managing Director Ajay Singh said: “We are pleased to announce the successful resolution of our dispute with Echelon Ireland Madison One, marking another significant milestone for SpiceJet. This settlement not only underscores our commitment to financial prudence but also enables us to further fortify our fleet with the acquisition of two airframes.”