Key Points:

  • Aircraft lessors demand aircraft preservation and maintenance records following reports of missing or corroded jet parts.

  • Go First argues that meeting these demands will consume significant time and resources, potentially affecting its revival.

  • Legal filings reveal Go First's request for the lessors' pleas to be dismissed.

SMBC Cautions Against Indian Law's Impact on Leasing Market Confidence

NEW DELHI —The resurgence of Indian airline Go First may be at risk as aircraft lessors press a Delhi court for maintenance and aircraft preservation records. Legal filings have unveiled that this follows claims by Dubai Aerospace Enterprise (DAE) Capital and ACG Aircraft Leasing regarding missing jet parts or corrosion on their leased aircraft.

The lessors, limited to periodic inspections of the grounded planes, have approached the court with allegations that parts had been "robbed" or that the jets were deteriorating. As a counter, Go First's bankruptcy officer, Shailendra Ajmera, argues that these demands are time-consuming and could impede the airline's efforts to get back on track. He has officially asked for the lessors' appeals to be turned down in court.

Ajmera mentions in the court documents, "Meeting such demands would not only be a time-consuming exercise but would considerably divert Go First's resources away from resuming operations." He underscores the significance of these requests and their potential repercussions on Go First's day-to-day activities and its "going concern status".

This predicament follows Go First's receipt of bankruptcy protection in May. This protection, in line with Indian legislation, prohibited the repossession of over 50 grounded Airbus planes, resulting in a legal deadlock with foreign lessors. Now, these lessors, keen on retrieving their aircraft, are pressing the court to compel Go First to provide the requested records.

In addition, the world's second-largest aircraft lessor, SMBC, having also leased planes to Go First, sounded the alarm earlier in May. It cautioned that India's move to shield the airline's aircraft from repossession could unsettle the market, leading to a confidence dip.

Legal submissions from Go First, dated Sept. 8 and Sept. 17, which are not yet public, have been exclusively reported by Reuters. Both Go First and the two lessors have remained silent on the issue when approached for comments. The airline's pleas are slated for a hearing later this week.