Two years after Go First suspended operations, one-fourth of planes still in India

The Wadia-owned Go FIRST’s voluntary filing for bankruptcy in May 2023 had surprised many, particularly the lessors, who were caught unaware. Plagued by issues with Pratt & Whitney engines, disputes with P&W over the award in the Singapore Arbitration, and mounting groundings, the airline management exited the airline business.

What ensued was a long-drawn-out battle in the courts over possession of planes that the airline did not own and had stopped paying its lease rentals. A little over two years later, one-fourth of the fleet is still in India as lessors struggle to get the planes airworthy and airborne.

In the last week of May, VT-WJA flew out of India as VP-COB, flying from Bengaluru to Hyderabad and onwards to Tianjin. This marked the 41st aircraft of the erstwhile airline, which flew out of India. The Wadia group-promoted airline had 54 aircraft in its fleet when it suspended operations by filing for bankruptcy on a voluntary basis under the IBC. Over half of this fleet was already grounded at the time of bankruptcy. What followed was a legal battle by the lessors, and finally, in April 2024, the Delhi High Court directed the regulator, DGCA, to de-register the planes and facilitate transfer. The condition of the aircraft had subsequently deteriorated since the grounding, with some being grounded even when the airline was operational. Things might have moved on the deregistration front, but the lack of access to planes meant a lot of work for lessors to get them airworthy and then fly them out of India.

The first lot of planes started moving out of India in July 2024, with one-fourth of the fleet out in October and half of the fleet out by December last year. The aircraft requiring major repairs or those that were grounded for longer are the ones which have subsequently started leaving. Another 25% of the fleet left India between January and May this year, taking the total fleet which flew out to 75% of all planes present on the day of grounding.

At the time of grounding, the planes were at nine airports in India, of which five airports have seen all their planes flown away by the lessors. These are Nagpur, Ahmedabad, Hyderabad, Kochi and Goa - Mopa. This frees up much-needed bays for the airports, which also grappled with the Pratt & Whitney crisis with IndiGo requiring the airline to ground up to 80 aircraft from its fleet, awaiting engine replacements.

As of today, only 13 aircraft are left in India, with the majority continuing to be in Delhi, where 23 out of 54 were parked on the day of grounding. Currently, six aircraft remain grounded in Delhi, followed by four in Mumbai, two in Kannur and one in Bengaluru.

Change in legislation

One of the aftermaths of this was that the government finally introduced “The Protection of Interest in Aircraft Objects Bill”, which was passed in both Houses of the Parliament in April this year. The bill, which aims to align India’s aircraft leasing and financing ecosystem with global standards, will help improve investor confidence, which has seen a dip with almost every fall of an airline, except for Jet Airways, where the return was amicable.

The bill builds on the framework of the Cape Town Convention of 2001, which aimed to simplify and standardise international leasing agreements. While India had already adopted this in 2008, gaps in legal enforcement led to higher leasing costs, and this bill now helps plug those gaps, providing legal certainty to aircraft financiers and thus reducing costs for Indian carriers. However, these reforms have come as a reaction to the Go FIRST debacle and should have come much earlier.

Tail Note

Indian aviation has been riddled with skeletons from the past, with some airports still showing signs of Kingfisher Airlines and other smaller airlines which could not sustain the business. With Go Air's grounding, it probably became the last straw for the lessor community, and the government had to act fast to ensure business continuity, especially for 90% of the domestic market, which is now divided between IndiGo and the Air India group. Any benefits to these two will pass on to the consumers and will also help marginal players like Akasa Air and SpiceJet.

As for the airline, its case in the United States continues, but the airline did not find any takers, much in line with how it was in the past for others, with the Jet Airways IBC process not yielding a restart after repeated attempts.