India placed on watchlist with negative outlook amid Go First insolvency row; NCLT hearing to resume on Monday
1 min read 12 May 2023, 06:46 PM ISTAn UK-based aviation leasing watchdog has issued a warning to India over plane repossessions
PremiumAs the Go First-led aviation crisis continues, a global aviation leasing watchdog has placed India on a watchlist with a negative outlook. The development came even as the National Company Law Tribunal began hearing a plea by lessors against the moratorium on Go First's assets and liabilities. No interim orders have been passed so far and the NCLT will resume its hearing on Monday.
Go First's insolvency resolution proceedings have seen vehement opposition from lessors as they seek to repossess its planes, with three aircraft lessors challenging the insolvency. They have sought to re-possess aircraft and then export or re-lease the planes to other functional airline operators. The protection granted to Go First has also sparked international ire.
The Aviation Working Group - an UK-based entity - said that India had failed to comply with international aircraft repossession norms after airline Go First was granted bankruptcy protection. The AWG has placed the country on a watchlist with a negative outlook and could raise leasing costs for Indian airlines.
Such an outlook will "have a direct and material impact on future financings and leases to Indian airlines", AWG told Go First in a letter which was also sent to India's aviation minister.
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The development comes at a time when Indian air travel is booming and hundreds of new jets have been ordered by local carriers (who regularly turn to lessors to help finance plane purchases).
(With inputs from agencies)
