Country on Watchlist After Go First Bankruptcy Protection

25.08.2023 - 13:35 / skift.com / Amrita Ghosh

Global aviation leasing watchdog Aviation Working Group — that monitors leasing and financing laws on behalf of planemakers and lessors — has placed India on a watchlist with a negative outlook. Citing India’s failure to comply with international aircraft repossession norms after cash-strapped airline Go First was granted bankruptcy protection, the UK-based entity’s outlook falls under the Cape Town Convention, an international treaty on plane repossessions. India’s score has been reduced to 3 from 3.5 earlier. The move could translate into higher leasing costs for other Indian carriers. India’s inability to process deregistration applications for aircraft, whose leases got terminated before a freeze was imposed, resulted in a negative outlook, the watchdog said in a notice. Go First’s lessors include SMBC Aviation Capital, CDB Aviation’s GY Aviation Leasing, Jackson Square Aviation and Bank of China Aviation. The inability to repossess Go First’s planes in a timely manner comes as Indian air travel is booming and local carriers, which regularly turn to lessors to help finance plane purchases, have ordered hundreds of new jets. Go First filed for bankruptcy protection last week, blaming “faulty” Pratt & Whitney engines for the grounding of about half its 54 Airbus A320neos. The airline is only the latest — after the failures of Jet Airways and Kingfisher Airlines — struggling to stay afloat in an increasingly competitive market.

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