With NCLT order, lessors will not be able to take back Go First aircraft

New Delhi: Amid financial and operational headwinds, Go First might well be thanking its stars on Wednesday as the NCLT ruling also restrains taking back of aircraft by lessors, who have sought repossession of the airline's 45 planes in the last few days.

With the admission of the crisis-hit Go First's voluntary insolvency resolution plea and moratorium that is in place, the carrier does not have to worry about losing aircraft from its fleet, at least for now.

In the past few days, various lessors of Go First have requested aviation regulator DGCA to deregister a total of 45 aircraft under the Cape Town Convention. As per the norms, once a lessor makes such a request, the same has to be implemented by the authority concerned within five working days.

According to an aviation industry expert, the lessors starting filing the request for repossession of Go First planes from May 4 and since there were three days of holidays -- May 5, 6 and 7 -- the five-working days deadline is not yet complete. Against this backdrop, the NCLT ruling has come and now lessors cannot take back the planes, the expert added.

A legal expert involved in the Go First insolvency case said that lessors will not be able to take back planes now as the moratorium is in place.

Under the norms, if a lessor has invoked the Irrevocable De-registration and Export Request Authorisation (IDERA), then the plane concerned has to be deregistered.

In its order passed on Wednesday, the National Company Law Tribunal (NCLT) has also prohibited the "recovery of any property by an owner or lessor, where such property is occupied by or in the possession of the corporate debtor".

Go Airlines (India) Ltd, which operates air services under the brand name Go First, is the corporate debtor.

The airline submitted before the NCLT that it has a total of 54 aircraft, which are its main assets. Out of these, 28 are grounded due to the non-supply of engines by P&W, and the remaining 26 are operational.

The carrier will lose all its assets, if protection under the moratorium under Section 14(1) of the Insolvency and Bankruptcy Code (IBC), 2016 is not granted to it on an immediate basis, as per the submission.

As per Go First's application, it has committed default of Rs 2,660 crore toward aircraft lessors and Rs 1,202 crore towards its vendors.