Go First may have to sign new leases before relaunch

livemint.com:

NEW DELHI : Go First must sign fresh lease agreements for 30-35 aircraft since lessors have already terminated the previous ones following its insolvency filing, two people aware of the development said, delaying the low-fare airline’s plans for a quick return to skies. “While the airline is making active efforts to relaunch flight operations, it will need to re-enter into fresh lease agreements or get the termination revoked by the lessors in case it wants to operate these 30-35 aircraft whose lease agreements were terminated around the time the airline filed for insolvency," one of the two people said. Go First filed for insolvency on 2 May and suspended operations with effect from 3 May, leaving a void of 6.8% in the domestic civil aviation market.

Following this, its lessors terminated leases and sought to regain control of planes. The airline was operating a fleet of 27 aircraft when it filed for insolvency. The Wadia Group, the airline’s former promoters, has blamed engine manufacturer Pratt & Whitney for its predicament, stating it had to ground 30-50% fleet on average since 2020 due to engine scarcity.

“Termination of an aircraft lease is sacrosanct. If the airline has to restart operations, it will have to get lessors on board, as without a lease contract in place, even the insurance of the aircraft comes into question. Lessors will need a promise of payment of pending dues, and some comfort will have to be provided for cooperation in relaunch efforts," the second person added.