The admission of beleaguered low-cost airline Go First’s voluntary insolvency plea by the National Company Law Tribunal (NCLT) has upset global aircraft lessors – a development that could significantly increase the cost of operations for airlines, and subsequently increase the cost of flying.
Following the NCLT’s decision to accept Go First’s voluntary insolvency plea, the world’s second-largest aircraft lessor, SMBC Aviation Capital, wrote a letter to the tribunal, saying that lessors and international aircraft owners see India as a risky jurisdiction for aircraft leasing”.
It also warned that India’s decision to block leasing firms from reclaiming Go First planes will “jolt” the market and spark a confidence crisis, as per legal papers seen by news agency Reuters.
The statement came at a time when lessors have put in at least 50 requests to take back leased plans from two Indian airlines.
Lessors have filed petitions seeking to enforce rights under international norms and also said the development could spike risk premiums for leasing aircraft for domestic carriers operating in India.
While Go First’s insolvency and subsequent moratorium have put aircraft lessors in jeopardy, it could actually turn out to be worse for other domestic carriers operating in India and passengers.
The demand for air travel in India, which is the world’s third-largest aviation market, has seen a massive spike after the Covid-19 pandemic, and airlines operating in the country are falling short of aircraft to meet the demand.
As of now, Indian carriers have around 700 planes, and most of the commercial aircraft in the country are operated through a sale and lease-back model. The Go First episode, however, has triggered a sense of panic among lessors who have been left in the lurch.
16/05/2023 India Today
To Read the News in full at Source, Click the Headline
0 comments:
Post a Comment