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Go First’s troubles continue to mount. According to the DGCA website, on Thursday evening, lessors have moved aircraft deregistration requests for 23 Go First aircraft with two more to follow.
The debt-strapped airline filed for insolvency on May 2. However, within 48 hours of filing the petition, Go First has received notices from four more aircraft lessors and letters of termination from two more aircraft lessors. By Thursday evening, the DGCA uploaded deregistration requests for 23 aircraft. Sources say two more will follow.
According to documents reviewed by businessline , the airline owes a whopping ₹2,660 crore towards its lessors. It owes ₹1,200 crore towards its other operational creditors.
When Jet Airways was grounded, it had around 100 aircraft. By the time the matter was admitted and the insolvency process had started, only 11 aircraft remained in its fleet.
Sources said that the number of deregistration requests could persist till the time the NCLT does not admit the insolvency matter and by default, implement the moratorium.
Lessors’ arguments
Go First’s plea was heard on Thursday. Appearing for a group of aircraft lessors, senior advocate Arun Kathpalia argued that an interim moratorium is not a provision under insolvency law at this stage. He further urged the bench to let the lessors present their arguments.
His submission was that aircraft which were grounded due to engine issues were anyway not in airworthy condition. His contention was that the moratorium will only increase the cost for the airline as they will have to pay charges for aircrafts without utilizing it.
He questioned, “How will an insolvency resolution professional chase Pratt and Whitney if the Wadia group can’t do it?”
As of February 15, six lessors, collectively, have invoked letter of credits (LCs) worth of ₹344 crore. They have also started drawing down other LCs which will devolve on the Indian banks to the tune of ₹1,400 crore. On Thursday, the airline said that as a result of this, the consortium lenders had frozen its accounts.
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