Indian airline Go First's effort to start insolvency proceedings got further complicated as lessors of 20 aircraft to the bankrupt airline have asked the Indian aviation watchdog Director General of Civil Aviation (DGCA) to deregister them as a step towards taking them back. DGCA has published the details of the lessors and their requests on its website.
GY Aviation Lease, SMBC Aviation Capital, Banas Aviation Leasing Limited, Narmada Aviation Leasing Limited are among the lessors who have submitted requests to take back at least 20 planes including the brand new Airbus 320 neo jets on Thursday. The regulator should typically deregister the planes within five working days once a lessor sends a request to do so and publish the details on its website, indicating that the clock is ticking for the airline.
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“It’s natural for lessors to have concerns. Even prior to the grounding, some lessors repossessed a few aircraft leased to GoFirst. And in the light of the week’s events a few more will look to repossess,” said Rishi Jain, Chief Executive Officer, Jain Aviation Consultants.
Go First did not respond to DH’s queries on the lessors' bid to deregister the planes.
This follows the airline indicating it intends to return to the air soon, once its problems are solved, even as it announced the grounding of all flights on Tuesday, squarely blaming the US firm Pratt & Whitney for its failure to replace engines or supply spares. It claimed that half its fleet was grounded due to the engine issue and sought an interim moratorium to save its assets - a move the lessors are fighting.
"Currently, the assets of the company are not sufficient to meet its liabilities," Go First said in the filing.
The embattled carrier owes Rs 6500 crore to its creditors which include Indian banks such as Bank of Baroda, IDBI Bank, Central Bank of India and Deutsche Bank, according to its bankruptcy filing. It had not defaulted on any of these dues as of the end of April, Go First said in the filing and as reported by Reuters.
Its total liabilities to all creditors, including banks, financial institutions, vendors and aircraft lessors stand at Rs 11,463 crore.
The NCLT on Thursday didn’t rule on the insolvency resolution case filed by the airline seeking to restrain lessors from taking back its aircraft. With lessors asking Go First to return the 20 aircraft crisis is likely to deepen, aviation observers suggested.
Lawyers close to the matter have revealed that Wadia Group is keen to have control over the airline and will likely request a one-time settlement with banks that would involve creditors accepting a significant reduction in the amount owed.
“If Go can retain its operational aircraft and valuable slots and sorts the issues with Pratt & Whitney then a restart is defiantly possible. A quick judgement favorable from NCLT will definitely assist Go and aid a re-start,” Jain added.