Thursday, July 27, 2023

Big relief for Go First! NCLT refuses to restrain airline from using aircraft leased to it

In a big relief for Go First, the National Company Law Tribunal (NCLT) on Wednesday refused to restrain the airline from operating or flying aircraft. The tribunal, in its interim order, said as the civil aviation regulator Director General of Civil Aviation (DGCA) had not deregistered the aircraft, they are available to Go First for use to resume operations.

"As long as the aircraft/engines are registered, they can be used for operating or flying to keep the corporate debtor as a going concern within the safety norms prescribed by the regulator," the order said, as reported by legal site Bar and Bench.

The tribunal was hearing a plea filed by lessors, Bluesky 31 Leasing Company, Bluesky 19 Leasing Company, Jackson Square Aviation Ireland, SMBC Aero Engine Lease, Engine Lease Finance, and BOC Aviation (Ireland), mainly to refrain Go First from operating the aircraft owned by them for commercial use.

The tribunal said that to keep Go First as a going concern, the aircraft leased to it must be flown. “In order to keep the corporate debtor as a going concern, the aircraft have to be flown, hence, the aircraft shall be with the corporate debtor and shall be operated by the corporate debtor. Therefore, we see no reason to allow this interim relief claimed by the applicants (engine and aircraft lessors),” the order stated.

Meanwhile, the tribunal also did not allow the leasing companies to conduct inspections of their aircraft/engines.

“Allowing inspection would only act as an impediment to the effective discharge of the duties of the resolution professional which includes the protection and maintenance of the engines at the prescribed levels of efficiency/safety,” the tribunal said.

The NCLT on May 10 admitted the plea of Go First to initiate voluntary insolvency resolution proceedings and appointed Lal of Alvarez & Marsal as IRP of the airline. Later he was replaced by Shailendra Ajmera.

Last week, the civil aviation regulator granted conditional approval for Go First to resume flights with 15 aircraft or 114 daily flights.

27/07/2023 Business Today

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