Go First's lessors' request to repossess planes on hold, not rejected: DGCA

Aviation regulator DGCA on Tuesday said crisis-hit Go First airline's lessors' request to repossess planes has been put on hold and not rejected.

The Directorate General of Civil Aviation's stance comes despite a 2001 global treaty, called the Cape Town Convention, designed to protect repossession rights. India has ratified the treaty but the DGCA argued there was no local legislation enforcing it, rendering it ineffective.

The DGCA filing said local laws "prevail over provisions of any international treaty that India is a signatory to".

The regulator said it is not processing Go First's lessors' request as bankruptcy law has imposed freeze on airline's assets. DGCA said no local law gives right to lessors to repossess planes when bankruptcy protection is ongoing. 

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In granting bankruptcy protection, NCLT 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.

DGCA said that while the bankruptcy process is ongoing it cannot legally approve repossession requests from lessors, leaving it "no other option" but to keep all application "pending in abeyance".

Go First's lessors, which include Standard Chartered's Pembroke Aircraft Leasing, SMBC Aviation, CDB Aviation's GY Aviation Leasing, Jackson Square Aviation and BOC Aviation, have initiated separate legal action to reclaim their planes.

Senior executives of Go First, which is undergoing insolvency resolution process, on Monday discussed its revival plans with officials of aviation regulator DGCA, reported PTI quoting a source.

The meeting, held in New Delhi, came against the backdrop of the DGCA, last week, asking the grounded airline to submit its revival plan within 30 days.

The budget carrier, filed a petition for voluntary insolvency resolution proceedings on May 2, citing its inability to carry out operations due to non-delivery of engines by the US engine maker Pratt & Whitney. The plea of the airline, which has not flown since May 3, was admitted by the National Company Law Tribunal (NCLT) on May 10.

Currently, the airline has suspended operations till June 4 adding that a full refund will be issued to the passengers.

Meanwhile, Go First has offered its captains Rs 1 lakh per month as ''retention allowance,'' in addition to their salary, as per a communication sent out to them on Sunday.

''First officers, in addition to their present salary, will get an additional Rs 50,000 per month as retention allowance,'' it said.

These allowances will be paid from June.

With inputs from PTI