Go First Crisis: DGCA should de-register aircraft, lessors tell Delhi HC

Go First Crisis: Aircraft lessors - Pembroke Aircraft Leasing 11 Ltd, SMBC Aviation Capital Ltd, Accipiter Investments Aircraft 2 Ltd and EOS Aviation 12 (Ireland) Ltd - on Friday moved the Delhi High Court seeking to de-register their aircraft currently on lease with the cash-strapped airline Go First.

In a major blow to its passengers, the low-cost airline stopped flying on May 3 and is undergoing voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT). The airline has around 5,000 employees.

The lessors said it is illegitimate of Directorate General of Civil Aviation (DGCA) to deny deregistration.

On Justice Pratibha M. Singh recusing herself from hearing the matter on Thursday, Justice Tara Vitasta Ganju heard the arguments on Friday. Justice Ganju has listed the matter for hearing submissions by the respondents on May 30, and also asked the parties to file written submissions a day before.

The lessors' contention is that Go First has no right to use their aircraft as the leases concerning them have been terminated.

The National Company Law Appellate Tribunal on Monday upheld the insolvency proceedings against Go First in a setback to efforts of its lessors to repossess their aircraft.

Upholding the NCLT's May 10 order, the appeals tribunal disposed of the lessors' petition and asked them to file an appeal before the NCLT. The airline had approached the NCLT "due to the ever-increasing number of failing engines supplied by Pratt & Whitney's International

Aero Engines, which has resulted in Go First (airline brand) having to ground 25 aircraft (equivalent to approximately 50 per cent of its Airbus A320neo aircraft fleet) as of May 1, 2023".

According to the lessors' counsel, they had approached the civil aviation authorities to deregister their aircraft, but the request was denied. They said the DGCA had not contacted them, but after checking the status of their applications on the regulator's website, they discovered their petitions had been turned down.

Senior advocate Mukul Rohatgi, appearing for one of the lessors, said the aircraft was its property and an interim resolution professional (IRP) has no power to take over assets of a third party.

Senior advocate Dayan Krishnan, representing EOS Aviation 12 (Ireland) Ltd, said the NCLAT cannot deal with the issue of deregistration of aircraft and the remedy lies under Article 226 of the Constitution as the issue is between the lessor and the DGCA.

"The percentage of grounded aircraft due to Pratt & Whitney's faulty engines has grown from 7 per cent in December 2019 to 31 per cent in December 2020 to 50 per cent in December 2022. This is despite Pratt & Whitney making several ongoing assurances over the years, which it has repeatedly failed to meet," Go Airlines had said.

According to Go Airlines, it has been forced to apply to the NCLT after Pratt & Whitney, the exclusive engine supplier for its Airbus A320neo aircraft fleet, refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC).

The respondents in the instant case include Union of India and Director General of Civil Aviation.