Lessors to Jet Airways are planning to ask aviation regulator Directorate General of Civil Aviation (DGCA) to deregister many more planes leased to the airline, three sources said, signalling a planned bailout of the debt-laden carrier is failing to assuage their concerns. About six lessors are expected to apply to the DGCA to deregister up to 15 planes that have already been grounded, over the next 10 days, one of the sources with direct knowledge of the matter said. This is in addition to the five planes that MC Aviation Partners, a subsidiary of Mitsubishi, applied on Friday to deregister, the source said. Once deregistered, lessors can take the plane out of the country and lease them to other airlines.
While some lessors have already taken their planes out after a mutual agreement with Jet, sources say the latest applications to do so are on a non-consensual basis. This deepens the crisis for Jet that has had to ground more than three-quarters of its fleet of 119 planes, many due to non-payment to lessors, leading to hundreds of flight cancellations. It was not immediately clear which of its lessors were planning to apply for deregistration in the coming days.
About 100 of Jet’s 119 mainly Boeing planes are leased by companies such as Avolon, GE Capital Aviation Services and AerCap Holdings. Avolon, one of the world’s biggest aircraft lessors, on Thursday applied to the DGCA to take two of its planes placed with Jet outside of India, making it the first to pull planes out on a non-consensual basis.
“The lessors are really hassled,” said one of the sources, declining to be identified as the discussions were private. “Nobody wants to take risks.” Jet, the country’s oldest private carrier now controlled by its lenders, did not respond to requests for comment.
After Kingfisher Airlines’ disorderly collapse in 2012, India modified rules in line with the Cape Town convention, an international treaty that makes it easier for foreign lessors to repossess aircraft during payment defaults. In theory, lessors have the option to file a complaint with the DGCA, which in turn can cancel a plane’s registration within five working days. But this is subject to some conditions such as clearing dues owed to airport operators, fuel vendors, tax authorities and other private entities.
Source – FE