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go first bankruptcy insolvency crisis news flight status airlines DGCA delhi high court lessors re register NCLT

Aircraft lessors — Pembroke Aircraft Leasing 11 Ltd, SMBC Aviation Capital Ltd, Accipiter Investments Aircraft 2 Ltd and EOS Aviation 12 (Ireland) Ltd — petitioned the Delhi High Court on Friday to have their currently leased aircraft removed from the register, according to airline Go First.

In a major blow to its passengers, the low-cost airline suspended operations on May 3 and is currently undergoing voluntary bankruptcy proceedings before the National Company Law Tribunal (NCLT). The airline employs around 5,000 people.

The landlords said it was unlawful on the part of the Directorate-General for Civil Aviation (DGCA) to refuse de-registration.

To Judge Pratibha M. Singh, who declined to hear the matter on Thursday, Judge Tara Vitasta Ganju heard the arguments on Friday. Judge Ganju listed the matter for hearing the defendants’ motions on May 30 and also asked the parties to file written motions a day before.

The lessors claim that Go First has no right to use their aircraft as the leases affecting them have ended.

The National Company Law Appellate Tribunal on Monday upheld Go First’s bankruptcy case, a setback to its lessors’ efforts to regain ownership of their aircraft.

The Court of Appeals upheld the NCLT’s May 10 order, dismissed the landlords’ petition and ordered them to appeal to the NCLT. The airline had contacted the NCLT “due to the ever-increasing number of failed engines supplied by Pratt & Whitney’s International.”

Aero Engines, which has resulted in Go First (airline brand) having to ground 25 aircraft (equivalent to approximately 50 percent of its Airbus A320neo aircraft fleet) from May 1, 2023.”

According to the landlord’s lawyer, they had applied to the Civil Aviation Authority to deregister their plane, but the request was denied. They said the DGCA had not contacted them, but after checking the status of their applications on the regulator’s website, they found that their petitions had been denied.

Lead attorney Mukul Rohatgi, acting for one of the lessors, said the plane was its property and an interim resolution professional (IRP) was not authorized to take third-party assets.

Lead Counsel Dayan Krishnan, representing EOS Aviation 12 (Ireland) Ltd, said that the NCLAT could not deal with the aircraft de-registration issue and that the remedy was required under Article 226 of the Constitution as the matter was between the lessor and of the DGCA.

“The percentage of grounded aircraft due to Pratt & Whitney’s failed engines has increased from 7 percent in December 2019 to 31 percent in December 2020 to 50 percent in December 2022. This is despite the fact that Pratt & Whitney has made several ongoing assurances over the years that it has repeatedly failed to live up to,” Go Airlines had said.

According to Go Airlines, the company was forced to file an application with the NCLT after Pratt & Whitney, the exclusive engine supplier for its Airbus A320neo fleet of aircraft, refused to comply with an arbitration award made by an emergency arbitrator appointed under the 2016 Arbitration Rules the Singapore International Arbitration Center (SIAC) issued the ruling.

The defendants in the present case include the Union of India and the Director General of Civil Aviation.



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