Early this week, under pressure from the all-powerful Aviation Working Group (AWG), the goregulations (the Insolvency Bankruptcy Code, or IBC), exempting leased aircraft from freeze needed alignment with global practices.
The decision will help lessors repossess their aircraft if any airline in India files for bankruptcGo First Airline’s bankruptcy debacle, ensures that India adheres to international norms, safeglessors.
But wait. The refreshed regulations, especially for aircraft and engines, are not on a retrospectfiled for insolvency before the amendment, is out of this ambit.
About 80 per cent of India’s commercial aircraft are on lease, starkly contrasting the global avleasing instead of direct purchases can liberate significant funds. This financial flexibility alloto passengers and concentrate on expanding their business rather than servicing large debts.
In the Go First incident, lessors found themselves in a quagmire, unable to reclaim aircraft dueconcerns among industry heavyweights like SMBC Aviation Capital.
Cape Town Convention factor
To understand the significance of this alignment, one must appreciate the role of the 2001 Captreaty, endorsed by India in 2008, assures lessors of swift repossession in case of defaults. Whtreaty, the lack of domestic enforcement mechanisms led to clashes between global standards result? A downgrade in India’s compliance rating, signalling potential financial repercussions Earlier, as per Indian law, when a firm filed for insolvency, it was restricted from selling or traresolution process was completed. This mandatory pause, often termed a moratorium, could eor sometimes more. For entities that lease equipment to airlines, such as aircraft or engines, itlease out their assets in the interim, which disrupts their business activities.
The recent apprehensions raised by the AWG further underline this challenge. Their caution aimpediments in reclaiming Go First’s aircraft, indicates the global hesitance in navigating IndAdd to this, the complexities arising from Go Air’s recent bankruptcy filings and controversieengines, and one sees an environment marked by uncertainty.
07/10/2023 K Giriprakash/Federal
To Read the News in full at Source, Click the Headline
0 comments:
Post a Comment