Go First fallout: Lessors file plea to repossess 5 SpiceJet planes this week

NEW DELHI: SpiceJet CMD Ajay Singh‘s assertion that the airline is not filing for insolvency does not seem to have comforted lessors. On Friday, lessors asked the DGCA to de-register two more aircraft with the airline so that they can be repossessed. This week has seen requests for five SpiceJet aircraft to be repossessed under Irrevocable De-registration and Export Request Authorisations (IDERA). Lessors use this option in cases like default of lease rentals and aviation regulators have to de-register aircraft within five days of getting this request.
Foreign lessors have been alarmed ever since National Company Law Tribunal (NCLT) admitted Go First’s plea for voluntary insolvency due to which their request for repossessing 45 of Go’s 54 aircraft cannot be processed. Following this, aircraft leasing watchdog Aviation Working Group (AWG) issued a ‘watchlist notice’ for India. It warned this case “would have a direct and material impact on future financings and leases to Indian airlines.” AWG is non-profit entity co-chaired by Airbus and Boeing and comprises of the world’s biggest aviation manufacturers, leasing companies, and financial institutions.
An aircraft lessor, Aircastle, has filed insolvency resolution proceedings against SpiceJet on April 28, 2023. NCLT this Monday issued a notice to SpiceJet and the next hearing is scheduled for May 17.
“Lessors are scared after the Go First episode and will try to repossess their planes at the first sign of financial troubles in an Indian carrier as they now know if the airline goes into insolvency, they will not be able to get their planes back,” said an industry insider.
On Thursday, Ajay Singh tried to reassure lessors and other stakeholders when he ruled out filing for insolvency. “There is absolutely no question of filing for insolvency. Any rumour regarding the same is completely baseless. We are focussed firmly on reviving our grounded fleet and getting more and more planes back into the air. Work on this front has already begun and the company is using the $50 million ECLGS funds and our own cash,” the SpiceJet CMD had said.
The past few months have seen some lessors filing applications with DGCA to repossess their planes from the airline. “We have a great relationship with all our partners. Our lessors have supported us through thick and thin and continue to do so and we are grateful for their support,” Ajay Singh had said. SpiceJet has been defaulting on statutory dues like paying provident fund and TDS for many months now.

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