Aviation leasing watchdog cuts India's rating amid Go First legal tussle with lessors
Aviation Working Group said with a warning of further downgrading of ratings. Aviation Working Group (AWG) monitors leasing legal and financial laws and operates on a non-profit basis jointly chaired by Airbus and Boeing. India's rating has been lowered from 3.5 out of 5 to 2.
The downgrade comes amid a tussle between Go First and its lessors who are seeking repossession of aircraft. The lessors have expressed concerns that essential aircraft components are deteriorating or being unlawfully taken away. Exciting news! Mint is now on WhatsApp Channels :rocket: Subscribe today by clicking the link and stay updated with the latest financial insights! Click here! Go First declared bankruptcy in May and the Indian regulations prevented lessors from claiming 50-plus grounded Airbus planes.
As per the report, AWG said that 130 days have passed since the lessors requested to repossess the aircraft. India is a signatory to the Cape Town convention which lays out a maximum waiting period of 60 days. This international treaty is designed to safeguard the rights of lessors when it comes to reclaiming their assets.
AWG members include Aircastle, BOC Aviation, SMBC Aviation Capital, Deutsche Bank, Goldman Sachs, and Morgan Stanley. The Go First situation and the subsequent downgrade might exacerbate the erosion of lessor trust within the world's third-largest aviation market. "Exciting news! Mint is now on WhatsApp Channels
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