Dublin: The UK-based Aviation Working Group (AWG) has placed India on a negative list, citing its failure to comply with international leasing standards following the airline Go First’s solvency protection. As a result of this action, India’s score has dropped from 3.5 to 3. Neither the government nor the aviation regulator have responded.
The observation came after the lessors failed to take back the Go First planes on time. The group alleges that India has failed to comply with international aircraft repossession norms. This action is also expected to raise lease costs for Indian airlines.
Go Airlines (India) Ltd. filed for solvency protection last week. The decision was made after nearly half of the company’s 54 A320 Neos Airbuses were grounded due to Pratt & Whitney (P&W) engine problems. The Indian tribunal then ordered the freezing of Go First’s assets. However, some lessors had already ended their contracts with the airline. The aviation regulator had requested that more than 40 of their planes be repossessed. However, India refused to process deregistration requests for these planes.
India also made it easier after the Cape Town Convention in 2008 for lessees to repossess aircraft if airlines defaulted on payments. However, under the Indian Solvency Protection Act, aircraft repossession is not permitted.
The AWG is the agency in charge of overseeing leasing and financing regulations for aircraft manufacturers and suppliers. Go First’s lessors are SMBC Aviation Capital, CDB Aviation’s GY Aviation Leasing, Jackson Square Aviation, and Bank of China Aviation.
The non-profit organisation, led by Airbus and Boeing, includes lessors and financial institutions such as Aircastle, BOC Aviation, SMBC Aviation Capital, Deutsche Bank, Goldman Sachs, and Morgan Stanley.
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