Mumbai: SpiceJet Ltd on Wednesday said it has settled all disputes with its aircraft lessors and is taking seven more planes on lease to meet its flight plans for the summer schedule that started on 29 March.

SpiceJet has entered into an in-principle understanding with its five lessors, managed by BBAM Aircraft Leasing and Management, with regard to five aircraft operated by the airline, the airline said in a statement to the stock exchanges.

The lessors have agreed to suspend the court proceedings (including winding-up proceedings) and deregistration process of aircraft, subject to SpiceJet satisfying the terms of settlement and parties executing definitive agreements, the airline told BSE.

The airline is also expected to get a fund infusion of 500 crore in April to recapitalize the company and fund expansion.

In a phone interview, SpiceJet’s promoter Ajay Singh said the airline has agreed to settle disputes and the lessors have agreed to suspend all legal actions against the airline in various Indian courts. “These disputes were old. Now, we have reached a formal agreement to end all disputes. The lessors have agreed to suspend all legal actions. In fact, we are in the process of leasing out seven planes in April," Singh said.

The Delhi high court on 19 March ordered India’s aviation regulator to deregister six SpiceJet planes so lessors could take them back.

Early last week, the Chennai high court had issued a notice to SpiceJet on winding up petitions filed by another set of leasing companies. Later, SpiceJet said it had resolved a dispute over planes with lessors.

SpiceJet’s lessors include BOC Aviation, Wilmington Trust SP Services (Dublin) Ltd and BBAM Aircraft Leasing and Management. “Now, there are no more legal issues. We are back to shape. For network, we are leasing seven planes from some existing lessors and two new lessors," Singh said.

Singh, a co-founder of SpiceJet who exited the airline in 2010, is back in control after buying out the entire 58.46% stake of Kalanithi Maran and Kal Airways Pvt. Ltd on 23 February.

He said confidence is returning to the airline and pilots who had earlier submitted their resignations have started withdrawing them.

“On the last count, at least 14 pilots have expressed their willingness to withdraw resignations," Singh said.

He said the airline will also get a fund infusion of 500 crore in April. He did not disclose the nature of the funding. SpiceJet had got 500 crore last month by the way of a soft loan.

Singh, who is expected to team up with JPMorgan Chase and Co. and a local investor, is planning to invest at least 1,400 crore in the airline as a lifeline to SpiceJet.

On 5 December, the aviation ministry asked SpiceJet, which was raising some of its working capital through advance-ticket sales, to stop the sale of tickets more than a month in advance of the travel date.

That restriction came after the airline cancelled around 1,800 flights in December, following a reduction in its fleet size, largely owing to financial reasons. This, along with reports of unpaid salaries, prompted the aviation regulator to act to prevent a repeat of what had happened with Kingfisher Airlines Ltd, the debt-laden airline that was grounded in 2012.

However, the curb on advance sales precipitated a crisis by drying up SpiceJet’s source of funds.

In December 2014, the airline briefly grounded its fleet after oil firms refused fuel supplies until it paid its dues. The aviation ministry later lifted the restriction on advance bookings.

Shares of SpiceJet gained 3.46% to close at 22.45 on BSE on Wednesday, while the benchmark Sensex gained 1.08% to close at 28,260.14 points.

Separately, the airline has paid a part payment of 25 crore to the Airports Authority of India towards its total dues of 300 crore to the state-run airport operating firm.

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