Indian Court Grants Go First Lessors Access to Inspect Aircraft during Stalled Operations
An Indian court has ruled that leasing companies can access and inspect aircraft leased to Go First for maintenance, despite being unable to repossess them while the airline’s operations remain halted. Go First, which was granted bankruptcy protection on May 10, has faced numerous attempts by lessors to reclaim planes due to missed payments.
Over 50 requests have been filed by lessors with the watchdog to allow repossession, arguing that the airline has no rights over the planes as the leases have already been terminated. However, the government of India and the airline claim that the bankruptcy law enforces an asset freeze.
In the recent ruling, the Delhi High Court judge has authorized the leasing companies to access the airport and carry out inspections on the aircraft. They are also permitted to conduct all interim maintenance at least twice a month.
The decision provides the leasing companies with a means to monitor the condition of the aircraft and ensure necessary maintenance is carried out. However, it falls short of granting repossession rights until the airline’s operations resume.
Go First, formerly known as GoAir, is currently facing financial challenges, with missed payments to lessors resulting in their attempts to reclaim leased planes. The airline, following bankruptcy protection, had its operations stalled, leaving lessors concerned about the condition and status of their assets.
The court ruling now allows the leasing companies to maintain oversight, ensuring the planes remain in a fit and serviceable condition during this period of operational inactivity. This will help safeguard the value and usability of the aircraft, should Go First be unable to resume operations.
By granting access to the airport and permitting inspection and maintenance, the court has taken a cautious approach to protect the interests of both the leasing companies and the beleaguered airline. The decision acknowledges the importance of maintaining and preserving the assets while the bankruptcy proceedings and operational challenges are ongoing.
While the lessors may not gain immediate repossession rights, the ability to regularly inspect the aircraft provides an opportunity to assess their condition and the extent of maintenance required. This enables the leasing companies to ensure the planes remain in optimal working order and ready for future use or potential re-leasing.
The ruling reflects the need to balance the rights of both parties involved, taking into consideration the complex legal framework surrounding bankruptcy proceedings and asset freezes. It demonstrates the court’s commitment to addressing the concerns of the lessors, given their substantial financial investment in the leased aircraft.
Going forward, the leasing companies will continue to monitor the situation closely, as Go First navigates the bankruptcy process and addresses its financial challenges. The court’s decision to allow ongoing maintenance provides a safeguard against further deterioration of the aircraft, which ultimately benefits all parties involved.
Although the lessors may still seek repossession once the airline’s operations resume, the ruling ensures that the leased aircraft are well-maintained and preserved, protecting their value and potential for future use. As the legal and financial proceedings unfold, it remains to be seen how the situation will develop and whether Go First will be able to revive its operations.
In the meantime, the court’s ruling offers some reassurance to the leasing companies, allowing them to maintain oversight and protect their assets. The regular inspections and interim maintenance will mitigate any potential risks associated with prolonged inactivity, safeguarding the leased planes until a resolution is reached.
The court’s decision demonstrates a balanced approach, striving to safeguard the interests of all stakeholders involved. It acknowledges the complexity of the situation and provides a temporary solution that addresses the immediate concerns of the leasing companies, while also respecting the legal constraints imposed by the bankruptcy law.
It remains to be seen what the future holds for Go First and whether the airline will be able to resume operations successfully. In the meantime, the leasing companies can now actively monitor and maintain the leased aircraft, ensuring they are in good condition and prepared for any future developments. This ruling serves as a reminder of the importance of protecting the investments made by leasing companies while navigating complex bankruptcy proceedings.
