Go First dispute spurs improvements in India’s lessor protections

While the Indian government’s move to solidify lessors’ rights could cause headaches for the bankrupt airline Go First, in the longer term it should help second-tier Indian airlines secure aircraft lease deals.

The ruling by India’s Ministry of Corporate Affairs (MCA) reinforces the ability of lessors to reclaim their aircraft when an airline declares insolvency. This step was spurred by a court’s decision to place a moratorium on the repossession of Go First’s leased aircraft during its bankruptcy restructuring.

Go First’s lessors have been challenging the earlier court decision, and the latest MCA edict will give them new leverage.

Meanwhile, some other Indian airlines have applauded the MCA’s clarification, as it will give lessors greater confidence in sending aircraft to India.