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Bloomberg
SpiceJet Ltd, one of the world’s biggest customers for Boeing Co’s now-grounded 737 Max jets, said an interim offer of compensation from the US planemaker is higher than what the Indian budget carrier recognised earlier.
SpiceJet, India’s second biggest airline, has been using an unusual accounting method to book income on expected compensation from Boeing in the past few quarters. SpiceJet, which had 13 Boeing 737 Max jets in its fleet when they
were grounded worldwide, has added 8.6 billion rupees ($117 million) as other income from compensation and related foreign exchange gains in the past five quarters, the company said.
Based on current advanced discussions and an interim offer from Boeing, “which is higher than the amount recognised by the company,†SpiceJet is confident of collecting that amount, it said in its quarterly earnings statement to stock exchanges.
However, its auditors SR Batliboi & Associates, cautioned in a report posted on stock
exchanges that “there is no
virtual certainty to recognise such other income and related receivable.†SpiceJet’s comments may provide some insight into the costs Boeing may incur for compensating carriers worldwide over lost revenue, which is expected to run into several billions of dollars.