Reuters
[Source: Reuters]
India has been placed on a watchlist with a negative outlook by a global aviation leasing watchdog, which said it had failed to comply with international aircraft repossession norms after airline Go First was granted bankruptcy protection.
The move by the Aviation Working Group, a UK-based entity that monitors leasing and financing laws, could raise leasing costs for Indian airlines and hurt lessors’ confidence just as the world’s third-largest domestic market faces record growth.
Such an outlook will “have a direct and material impact on future financing and leases to Indian airlines”, AWG told Go First in a letter copied to India’s aviation minister.
Go Airlines (India) Ltd filed for bankruptcy protection last week, blaming “faulty” Pratt & Whitney engines for the grounding of about half its 54 Airbus (AIR.PA) A320neos. Pratt, part of Raytheon Technologies (RTX.N), says the claims are without evidence and divert attention from the airline’s financial woes.
In granting protection, the Indian tribunal ordered a freeze on Go First’s assets even though some lessors had already terminated leases and placed requests with the aviation regulator to repossess more than 40 planes.
Failure to process the applications before the freeze was imposed, “results in a negative outlook”, AWG said a notice.
India’s aviation ministry and regulator were not immediately available to comment.
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