Aviation Watchdog AWG Lowers India's Rating Amidst Ongoing Legal Battles With Grounded Airline Go First

The Aviation Working Group (AWG), a not-for-profit legal entity comprising of major aviation manufacturers, leasing companies and financial institutions, has recently downgraded India's rating in compliance with international law governing aircraft leasing. This decision comes amidst ongoing efforts by lessors to reclaim planes leased out to the now-grounded airline Go First. The AWG's outlook for India is currently negative.

Implications under Cape Town Convention

Under the provisions of the Cape Town Convention (CTC), lessors have the right to take back possession of aircraft leased to airlines. However, as Go First is presently undergoing an insolvency resolution process, a moratorium is in place which prevents this action. Consequently, lessors are embroiled in a legal battle with Go First over reclaiming their leased planes.

Lack of CTC Remedies for Lessors

In its recent update, AWS noted that CTC remedies have remained inaccessible to lessors. Additionally, they have been unable to access aircrafts for inspection purposes which would determine whether their planes are being maintained according to lease agreements as mandated by CTC regulations.

Timeframe Concerns

The commencement of Go First insolvency proceedings has lasted 130 days so far; more than double the timeframe within which India had committed—under international law—to make relevant CTC remedies available. This delay was highlighted by AWS on September 25th.

India's Position as Signatory of CTC

Despite being a signatory of the Cape Town Convention (CTC), India seems challenged in adhering strictly to its guidelines and mandates especially regarding timely provision of remedies under circumstances like these. This situation raises concerns about potential implications on future transactions involving Indian airlines and global leasing entities.

In conclusion, it is evident that the ongoing legal battle between Go First and its lessors has led to a downgrade in India's rating by the AWG. This situation not only affects current proceedings but could potentially impact future leasing agreements involving Indian airlines. It underlines the need for India, as a signatory of CTC, to ensure strict compliance with international laws governing aircraft leasing. These events further underscore the importance of timely provision of remedies during insolvency proceedings in order to maintain trust and credibility in global aviation markets.