Go First: Trouble worsens as lessors seek to take away 33 aircraft
With 50 per cent of its fleet grounded due to the problems with Pratt & Whitney engines, the airline has got a portion of its hull insurance premium, said a top official
In the latest twist to the Go First saga, the lessors of an additional 13 A320 aircraft - bringing the total to 33 - have taken matters into their own hands by exercising their rights to unilaterally request for deregistration and export of the planes from India.
This move comes amidst the airline's ongoing financial troubles as it seeks to navigate the challenging terrain of bankruptcy protection and debt restructuring. The situation remained fluid on Monday, with stakeholders closely monitoring developments in what is becoming a high-stakes game of brinkmanship.
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As the storm clouds continue to gather over beleaguered airline Go First, the company has turned to the National Company Law Tribunal (NCLT) in a bid to stave off disaster. In a move designed to buy some time and breathing space, the embattled airline cited urgent need and requested the bankruptcy court's intervention on its plea for an interim moratorium.
According to Go First, the situation has been further complicated by notices from aircraft lessors terminating their agreements, and the fact that they have already made representations to the Directorate General of Civil Aviation (DGCA). The airline is clearly fighting for its survival, with the stakes high and the outcome uncertain.
According to a statement made before the National Company Law Tribunal (NCLT), Go First has accused lessors of taking unilateral action to take possession of aircraft despite the fact that the case is still before the court.
The airline also claimed that it is being prevented from carrying out crucial maintenance work, exacerbating an already difficult situation. With the matter subjudice, tensions are running high, and the stakes have never been higher for the embattled airline.
Meanwhile IANS reported that with 50 per cent of its fleet grounded due to the problems with Pratt & Whitney engines, the Wadia group's low cost Go Airlines (India) got a portion of its aircraft hull insurance premium from its insurers.
The airlines' total fleet size is 54 aircraft, out of which 27 have been grounded for more than a year, Kaushik Khona, Chief Executive Officer, Go Airlines, told IANS.
"Last year, we got a refund of the premium paid for covering the aircraft hull. The refund was about 70 per cent. The insurer was New India Assurance," Khona said. He however declined to share the actual quantum of 'lay-up period' premium refund received by the airline.
Simply put, lay-up premium refund in the case of aviation insurance means refund of premium for the period an aircraft did not fly. When this refund would kick-in is a subject matter of the policy conditions.
Even though the aircraft is on the ground, the airline will not get a premium refund on a pro-rata basis as it is exposed to various kinds of risks while on the ground.
Normally, the lay-up premium refund is adjusted at the end of the policy period.
In normal circumstances, an airline may have a couple of planes grounded due to repair work or other issues. But in the case of Go Airlines' 27 aircraft fitted with Pratt & Whitney engines, they have been on the ground due to engine faults.
(With inputs from IANS)