The Delhi High Court has delivered a significant verdict in the ongoing saga of Go First's financial woes. In a major setback for the airline, the court has directed the Directorate General of Civil Aviation (DGCA) to process the deregistration of all 54 aircraft leased by Go First. This decision comes as a relief to the airline's lessors, who can now reclaim their property after nearly a year of waiting since Go First's bankruptcy declaration.
The order, issued on April 26th, mandates the DGCA to complete the deregistration process within the next five working days. This swift action will grant lessors access to their aircraft, allowing them to either re-lease them or explore export options. For those lessors who choose not to export, the court has instructed them to approach the court for further guidance.
The Airports Authority of India (AAI) will play a crucial role in facilitating the handover process. They will be responsible for communicating with the lessors regarding the airworthiness of the aircraft and any export procedures that may be required.
This verdict stems from a writ petition filed by aircraft lessors in May 2023. The lessors, including companies like Pembroke Aviation and SMBC Aviation, sought the court's intervention to recover their planes, which were grounded due to Go First's financial struggles.
Initially, the DGCA expressed reservations about deregistering the aircraft due to a moratorium clause associated with the airline's insolvency proceedings. However, a Ministry of Corporate Affairs notification issued in October 2023 clarified that aircraft leasing agreements are exempt from such moratoriums under the Insolvency and Bankruptcy Code (IBC). This clarification paved the way for the court's recent decision.
The ongoing legal battle regarding Go First's future coincides with efforts to find a new owner for the airline. Two bids have been submitted - one from a consortium led by SpiceJet chief Ajay Singh and another from Sharjah-based Sky One. While a final decision on these bids is yet to be made by Go First's lenders, the recent court order regarding aircraft deregistration casts a shadow over the airline's operational viability.Go First entered insolvency resolution proceedings in May 2023 after voluntarily filing for bankruptcy. The airline's financial troubles had left it unable to meet its lease obligations, prompting lessors to seek legal recourse.
The Delhi High Court's order signifies a turning point in this complex situation. Lessors can now reclaim their aircraft, and Go First faces the daunting task of navigating its future without its leased fleet. Whether the airline can secure new ownership and overcome its financial challenges remains to be seen. This story highlights the precarious nature of the aviation industry, where financial instability can have significant ripple effects across the entire ecosystem.
