India tribunal to rule on Go First bankruptcy request as lessors seek to repossess planes

By Arpan Chaturvedi and Aditi Shah

NEW DELHI (Reuters) -An Indian tribunal will decide on Wednesday on Go Airlines (India) Ltd's bankruptcy request, a notice on the tribunal's website showed, as leasing companies step up pressure to repossess planes following missed rental payments.

The low-cost carrier filed for bankruptcy protection last week, blaming "faulty" Pratt & Whitney (P&W) engines for the grounding of about half its 54 Airbus A320neos. P&W, part of Raytheon Technologies, has called the airline's claims "astounding" and without evidence.

Widely known as Go First, the Indian carrier has been flying for nearly two decades. If it collapses it would follow Jet Airways which went under in 2019.

Go First has argued bankruptcy proceedings are critical to reviving the airline, which it says has suffered as it did not get spare engines from P&W in recent months.

The airline leases its fleet of planes and leasing companies have stepped up pressure on Go First by filing requests with Indian aviation authorities to allow them to repossess 36 of Go First's 54 Airbus A320neo planes because the airline has not met rental payments.

A bankruptcy protection for Go First could hurt lessors efforts as it would supersede and stall the repossession requests, according to aviation lawyers in India.

The Indian government has said it is not inclined to save the airline, which is owned by India's Wadia Group.

India's Deputy Aviation Minister V.K. Singh told news agency ANI the government has previously held talks with P&W to resolve the issue at Go First, which until recently was India's fourth-largest by passengers flown.

"The problem with Go Air is that their flights are run on engines of Pratt & Whitney which is facing management issues since after COVID-19... So (engine) manufacturing is not happening at the pace that it should," Singh said on Monday.

"What can be done about a bailout? Where will Pratt & Whitney get (engines)? (A) bailout can only happen when something can be done about this," Singh said in response to a question about the possibility of a government rescue.

P&W did not respond to a request for comment on the minister's remarks.

The government is moving to protect passengers first, with the aviation regulator issuing a notice to Go First late on Monday to stop selling new tickets.

Go First, whose market share has fallen to 7.8% as of the end of March, from 8.8% in 2022, has also been asked to make cash refunds to passengers for cancelled flights, a government source told Reuters on Tuesday.

"The government is not thinking about a bailout as of now," the source added.

Go First's fate underscores fierce competition in India's aviation sector, dominated by IndiGo and the announced merger of Air India and Vistara, even though the sector has bounced back from the COVID-19 pandemic and passenger numbers have hit record highs.

(Additional reporting by Aditya Kalra; Editing by Muralikumar Anantharaman, Alexander Smith and Susan Fenton)