Former SpiceJet Pilots File Bankruptcy Plea Over Rs. 3 Crore Unpaid Dues

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GURUGRAM- Two former SpiceJet (SG) pilots have filed a bankruptcy petition against the airline over unpaid dues totaling ₹3 crore. The case adds to SpiceJet’s ongoing legal battles, highlighting financial struggles that have led to multiple insolvency claims.

The National Company Law Tribunal (NCLT) is reviewing the petition, which alleges non-payment of salaries, allowances, and overtime. The tribunal has yet to issue a notice, and SpiceJet maintains that the claims are baseless.

Photo: avgeekwithlens/ Harsh Tekriwal

Former SpiceJet Pilots File Bankruptcy

Captains Sameer Breja and Karan Gupta, who joined SpiceJet (SG) as first officers in 2011 and were promoted to captains in 2016, have approached the Delhi bench of the NCLT under Section 9 of the Insolvency and Bankruptcy Code (IBC).

Their petition claims the airline owes them ₹1.21 crore and ₹1.31 crore, respectively.

The dispute originated in 2020 when SpiceJet implemented salary cuts due to the COVID-19 pandemic.

The airline had assured employees that deferred payments would be disbursed once operations normalized.

However, it later set a condition of achieving 26,000 monthly flight hours to trigger payments—a benchmark the pilots argue was arbitrary and undisclosed during employment.

According to the petition, the airline retroactively revised their compensation in June 2020, further reducing their pay.

The pilots allege they had no choice but to accept the changes and that SpiceJet failed to honor even the revised agreements upon their resignation in 2023.

Photo : SpiceJet

NCLT’s Initial Response

During a hearing on 4 February, the NCLT remarked that it is “neither a labour court nor a writ court” and viewed the petition as a possible pressure tactic for payment.

The tribunal adjourned the case to 7 March without issuing a notice to SpiceJet.

Piyush Singh, managing partner at PSP Legal, representing the pilots, stated, “As SpiceJet did not pay the operational debt owed to us, we had no option but to initiate insolvency proceedings before the NCLT. A labour court was not an option since the dues exceed ₹1 crore.”

Singh also revealed that several other pilots have approached them with similar complaints, though their dues are below the ₹1 crore threshold required for an insolvency plea. Legal alternatives are being explored for them.

Photo: Photo: avgeekwithlens/ Harsh Tekriwal

SpiceJet’s Response

A SpiceJet spokesperson dismissed the claims as “baseless and frivolous,” asserting that the company has already settled the dues of both employees.

“They have been duly informed to complete the necessary documentation, following which the pending amount can be processed,” the spokesperson stated.

This case is part of a broader financial crisis for SpiceJet. As of November 2024, at least 16 insolvency claims had been filed against the airline, primarily by aircraft lessors and vendors.

Five cases have been settled, two are under negotiation, seven remain unresolved, and two have been dismissed.

In December, SpiceJet settled a $16 million dispute with aircraft lessor Genesis and a $90.8 million claim from Export Development Canada for $22.5 million, securing ownership of 13 Q400 aircraft.

Spicejet-pilots-no-fly-day | Image credits to its original creator

SpiceJet Ongoing Challenges

SpiceJet has been struggling with financial instability since the pandemic, leading to a sharp decline in market share.

According to the Directorate General of Civil Aviation (DGCA), the airline’s domestic market share dropped from 7.3% in January 2023 to 2.3% in August 2024. Of its fleet, 36 aircraft remain grounded.

To stabilize operations, the airline plans to reinstate 30 Boeing 737 MAX aircraft over the next 12-15 months. On 29 January, it reintroduced its first ungrounded 737 MAX.

Despite raising ₹3,000 crore through a qualified institutional placement, the airline remains entangled in legal disputes. Its ability to restructure debt and resolve creditor claims will determine its future viability.

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