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On July 13, aviation regulator Directorate General of Civil Aviation (DGCA) uploaded four requests seeking the deregistration of four SpiceJet Boeing 737 MAX aircraft—VT-MAX, VT-MXA, VT-MXB and VT-MXC. The requests were filed by Sky High Leasing and its affiliated companies, which had leased the aircraft to SpiceJet.
The DGCA acted on IDERA (Irrevocable Deregistration and Export Request Authorisation) requests. An IDERA is a formal legal instrument that empowers an aircraft lessor or lender to seek the deregistration, repossession and export of an aircraft if the lessee defaults on lease payments or loan obligations. Established under the Cape Town Convention, it simplifies the process for creditors to recover their assets from a defaulting airline, providing critical security for global aircraft financing.
The development comes as SpiceJet is also required to deposit Rs 144.5 crore in a long-running arbitration dispute with former promoter Kalanithi Maran and KAL Airways Pvt. Ltd. The Delhi High Court on Monday granted the airline relief by allowing it to make the payment in tranches.
Lessor rights strengthened.
India strengthened lessor rights by enacting the Protection of Interests in Aircraft Objects Act, 2025, which received Presidential assent in April 2025. The legislation formally incorporated the provisions of the Cape Town Convention into Indian law, aligning the country’s legal framework with international standards governing aircraft financing and leasing.
The law was enacted to boost aircraft leasing, lower financing costs and attract greater investment into India’s aviation sector.
Before this, although India was a signatory to the Cape Town Convention, domestic laws were not fully aligned with its provisions, making it difficult for lessors to repossess aircraft. The troubles faced during the collapse of Go First remain a prominent example. Ironically, two of the airline’s 54 aircraft continue to remain in India, three years after it filed for voluntary bankruptcy.
Where are the aircraft?
According to DGCA records, two of the SpiceJet aircraft are listed as being based in Hyderabad, while one each is based in Amritsar and Delhi. In reality, VT-MAX, VT-MXA and VT-MXC are parked in Hyderabad, while VT-MXB is parked in Kolkata.
VT-MAX was the first Boeing 737 MAX aircraft inducted into the SpiceJet fleet in October 2018, just months after Jet Airways introduced the first MAX aircraft in India. As was customary for the airline, the aircraft was given a name—“King Chilli.”
A lot has changed since then—for SpiceJet, India and the aviation industry.
The induction of the MAX fleet was expected to mark a turning point for the airline, which had recovered from its near-collapse in December 2014 following a change in management. However, the global grounding of the Boeing 737 MAX and the COVID-19 pandemic severely dented the airline’s recovery. Although its balance sheet later appeared stronger due to compensation received for the MAX grounding and the slump sale of its cargo subsidiary, SpiceXpress, all of its freighter aircraft remain grounded.
More trouble for SpiceJet?
SpiceJet’s domestic market share fell to 2.5% in May, despite it being the strongest month ever recorded for India’s domestic aviation market. The airline is yet to induct the wet-leased Airbus A320 aircraft that it had announced would join the fleet in July. Its operational fleet has shrunk to just a handful of aircraft, while its on-time performance remains among the worst in the industry. Yet, despite repeated setbacks, the airline has continued to survive.
In September 2024, SpiceJet raised Rs 3,000 crore from multiple investors, a move that was expected to support its turnaround. This was complemented by settlements with lessors of its Bombardier Q400 fleet. The airline owns 19 Q400 aircraft, but only two are currently operational.
Can the lessors recover the aircraft?
While the IDERA requests pave the way for the deregistration of the aircraft, physically removing them from India will be a more complex process.
Legal documentation is only one part of the challenge. The condition of the aircraft is equally important. Lessors may have to incur significant costs to restore aircraft that have not been stored under certified maintenance and preservation conditions.
Historically, difficulties in recovering leased aircraft have increased leasing risks for the entire country rather than just the defaulting airline. This often results in higher lease rentals for all Indian carriers. At a time when airlines are already grappling with the impact of a weaker rupee on lease payments, SpiceJet’s payment defaults could add further pressure to aircraft leasing costs in India.
Tail Note
Despite its challenges, SpiceJet has continued to operate flights to Dubai, one of its two remaining scheduled international destinations. However, it has significantly scaled back its domestic network, including suspending operations from Chennai, one of India’s six major metro airports.
Since all four aircraft covered under the IDERA requests are already grounded, their deregistration is unlikely to have any immediate impact on passengers.
SpiceJet has weathered numerous crises over the years—from adverse auditor observations and aircraft groundings to legal battles and disputes with lessors. But with its domestic market share down to just 2.5 per cent and its fleet reduced dramatically, the question remains: what does the airline have left to engineer another comeback?
Ameya Joshi is an aviation analyst.
