Lessors are seeking to take back possession of at least 20 Airbus SE jets operated by Go Airlines India Ltd., further complicating the insolvent carrier’s attempts to start flying again, even as a local bankruptcy court contemplates whether the company should get any respite.
(Bloomberg) — Lessors are seeking to take back possession of at least 20 Airbus SE jets operated by Go Airlines India Ltd., further complicating the insolvent carrier’s attempts to start flying again, even as a local bankruptcy court contemplates whether the company should get any respite.
Lessors including Dublin’s GY Aviation Lease, SMBC Aviation Capital and Pembroke Aircraft Leasing have applied to India’s Directorate General of Civil Aviation on Thursday to de-register the planes, including brand new A320neo jets, information posted on the regulator’s website showed. The regulator should typically deregister the planes within five working days of a request, meaning the clock is ticking for the airline controlled by billionaire Nusli Wadia’s group.
India in 2008 acceded to the so-called Cape Town Convention, which defines the rights of aircraft owners and lessors during payment defaults. While the agreement allows for the return of equipment quickly, India’s enforcement hasn’t been swift in past airline failures and woes, sometimes leading to increased lease rates for local carriers, and court cases.
Go Air — now re-branded as Go First — filed for insolvency protection Tuesday, blaming failing Pratt & Whitney engines for grounding about half its fleet of Airbus aircraft at a time when demand for travel is soaring. The National Company Law Tribunal on Thursday didn’t provide a judgment on an insolvency resolution case filed by the airline seeking to restrain lessors from taking back its aircraft.
The airline said it had to ground 30.5% of its Airbus A320neo fleet in 2020, 25.6% in 2021, and 33.9% in 2022, as Pratt failed to provide new engines and spares. That added up to a total equivalent of more than 47 years of potential flying time between January 2020 to February 2023 when aircraft were forced to be on the ground.
“The bigger issue here is more about this engine which has been breaking consecutively,” Mark Martin, founder of Dubai-based Martin Consulting LLC, told Bloomberg Television in an interview on Friday. “This problem is an industry problem and the first victim is Go Air. Never in the history of aviation has an airline gone belly up and gone under because of a component failing so severely.”
Pratt & Whitney, a unit of Raytheon Technologies Corp., has previously said the Go Air matter is subjudice, and it continues to prioritize delivery schedules for all customers.
Other airlines have faced troubles with Pratt & Whitney engines as well. Deutsche Lufthansa AG said this week a third of its Airbus A220 fleet in Zurich has been temporarily grounded because of issues with Pratt & Whitney engines. Turkish Airlines, Air Baltic Corp and India’s IndiGo have all faced problems with the turbines.
Once a plane is deregistered in India, airports can calculate their dues for three months preceding the lessor’s application, and once such payments and any other fresh dues are cleared by the lessor, the plane can leave the country, according to aviation law firm Sarin & Co.
Go Air is the third high-profile Indian airline forced to ground its entire fleet in the past decade or so in one of the toughest markets in the world. Cheap fares, high oil prices and weakness in the Indian currency all have contributed to multiple years of losses for carriers even as the South Asian nation remains one of the world’s fastest-growing aviation markets.
–With assistance from Haslinda Amin, Rishaad Salamat and Anand Menon.
(Adds background and analyst comment from fifth paragraph)
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