Lessors of bankrupt airline GoFirst Airways have proposed a neww way for Maintenance, Repair and Overhaul (MRO) services of their aircraft. GoFirst has been grounded since May month and there are no signs of the airline taking off any time soon.
No documentation, no maintenance
Months ago, the National Company Law Tribunal (NCLT) and Delhi High Court allowed the airline lessors to access maintenance record and documentation of their aircraft. Lessors have alleged that their aircraft are not being maintained properly. Not just lessors, even Resolution Professional Shailendra Ajmera has confessed that the airline do not have adequate funds to do maintenance of the aircraft.
Committee of Creditors earlier sanctioned a funding of Rs 100 crores, but now, funds are spent and CoC have refused to provide any funding. Because of no salaries since months, all technicians have left the airline. As a result of which, it is impossible for the airline to maintain the aircraft.
For months, the aircraft owned by lessors are not maintained properly. Moreover, RP is restricting lessors to access the maintenance records of their own assets. Due to this, lessors filed a contempt case in Delhi High Court.
Third party for MRO
On December 9, 4 lessors who have leased 23 aircraft to GoFirst Airways met in Mumbai for a meeting to get a resolution for MRO works. The 4 lessors are –
- SMBC Aviation Capital
- Aviation Capital Group
- Jackson Square Aviation
- EOS Aviation
These lessors proposed a new idea. They suggested that MRO work and maintenance documentation will neither be done by airline nor lessor but a third party MRO agency will do the work.
However, there are certain shackles here as well because for a third party agency to service aircraft in India, it will need permission and approval from Directorate General of Civil Aviation (DGCA). DGCA is the aviation watchdog of India, which oversees aviation safety. Once lessors execute a contract with the proposed MRO agency, a communication will be issued to DGCA for the approval.
A new ray of hope
Weeks after the deadline of Expression of Interest (EoI) ended, an Indian airline has expressed interest in buying GoFirst. SpiceJet, which is another cash strapped airline recently got approval for a funding of Rs 2,250 crore. The airline along with Safrik Investments and Sky One have shown interest in GoFirst Airways.
Earlier, Naveen Jindal backed Jindal Power Ltd backed off from bidding for GoFirst as they failed to find out the exact valuation of the airline. Most of the aircraft of GoFirst are leased and not owned by the airline. As a result of which, the airline has less value.
If this does not bring results, banks will have no option left apart from liquidation. GoFirst has given a huge land parcel in Thane as collateral to banks. Banks are looking to recover some dues by selling that parcel of land.
Source : Business Standard