Wadia Group’s air carrier Go First argued before the National Company Law Appellate Tribunal (NCLAT) on Friday that termination of leases of aircraft by their lessors would be of no consequence as the moratorium has been imposed under insolvency resolution proceedings.
Aircraft lessors, on the other hand, raised doubts over GoFirst’s revival through the Corporate Insolvency Resolution Process (CIRP), citing the amount required to fly again.
Senior advocate Arun Kathpalia, representing SMBC Aviation, said the average lease rent per aircraft for a month is around $2 lakh and for more than 50 aircraft, the monthly bill would be $10 million.
“The cost of this audacity is huge,” he said.
For SMBC Aviation alone, GoFirst has to pay $4.2 million per month, which includes maintenance and lease.
SMBC Aviation Capital Limited submitted that they had legal possession of their aircraft prior to the commencement of the insolvency process and that as of today, GoFirst has no right in possession of those aircraft.
Senior advocate Maninder Singh, representing GoFirst, submitted that the termination of the lease by SMBC Aviation is of no consequence as the moratorium is still in force.
Singh submitted, “This (moratorium) will override every short due. Your termination is irrelevant.”
Citing the need for GoFirst’s voluntary bankruptcy petition, Singh said 28 of its aircraft were grounded due to engine issues with Pratt & Whitney.
He was “forced to file the Article petition.”
The Wadia group firm has already received a favorable order in arbitration against the US-based jet engine maker and GoFirst will receive 10 engines per month from Pratt & Whitney.
He hoped that after this the situation would improve and GoFirst would come back and resume its services.
During the proceedings, Kathpalia also questioned the hearing at the National Company Law Tribunal (NCLT), which had earlier this week accepted GoFirst’s voluntary plea to initiate insolvency proceedings.
“What kind of hearing has happened? We were not even allowed to place a document for consideration and submit our arguments,” he said.
Two other lessees, GY Aviation and SFV Aircraft Holdings, which had moved the appellate tribunal on Thursday, also argued their case and opposed the CIRP against Go First.
The three lessors own about 21 aircraft, which were leased to the crisis-hit GoFirst.
The matter was partially heard and the Appellate Tribunal will continue its hearing on Monday.
The text of this story is published from a wire agency feed without any modification. Only the headline has been changed.
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