Aircraft lessors have told the Delhi High Court that bankrupt airline Go First is cannibalising key components from their aircraft according to documents and pictures seen by ET. The lessors are locked in legal battles with the airline to repossess their aircraft which they had leased to the airline
Over 50 aircraft of the airline have been grounded since May after the airline filed for voluntary bankruptcy citing faults with Pratt and Whitney engines. The bankruptcy protection law has prevented lessors from taking back aircraft despite cancelling lease agreements.
In July, allowed leasing companies to access aircraft leased to Go First for “inspections of their fleet and carry out engine and other maintenance work. During their inspection, lessors found that multiple critical parts of those aircraft have been cannibalised by the airline. Photos of the aircraft taken during inspection by the lessors show that critical parts like side stick, fan blades, tail cones of engine, transponder evacuation slides, lavatory seats are missing.
“The petitioner was not permitted to open panels to realise the true extent of cannibalisation. It is clear from a bare perusal of the pictures taken on the 9th of July 2023 that neither is Respondent No. 2 (aviation regulator DGCA) able to ensure the proper maintenance and preservation of the Petitioner’s aircraft and neither is Respondent No. 3 (Go First) able to maintain or preserve the aircraft. It is the Petitioner who is, for no fault of its own, suffering tremendous loss as each day passes,” one of the lessor Aviation Capital Group said in its petition.
An executive of a leasing firm said that they are worried that even if they get the possession of the aircraft, lessors will have to incur huge costs to make the planes airworthy again. “We are unable to lease those planes to airlines when there is huge demand. The longer the duration of grounding is, higher will be the hit to us as clearly the airline is not in a position to preserve those aircraft,” he said.
Queries sent to court-appointed resolution professional Shailendra Ajmera of EY were not responded to.
Lessors backed by multiple international banks such as Sumitomo Mitsui Banking Corporation, US conglomerate GE and China Development Bank have exposure to Go First.
Resumption of the airline has also been delayed as apprehensive lenders are yet to release contingency funding of Rs 450 crore as they are worried over the logjam in courts.
Experts said Go First should stop having a non-cooperative, hostile attitude to lessors and instead start communication with them. ‘It is very important that the resolution professional communicates and engages with lessors and follows contractual obligations in word and spirit. To protect the asset’s value, he also needs to ensure that the asset is maintained during their possession and no cannibalisation occurs,” said Vishok Mansingh, CEO of aircraft leasing company Vman.
