In May 2023, Go First went bankrupt, but leasing companies couldn’t take back the planes due to a legal restriction under the Insolvency and Bankruptcy Code, 2016. SMBC Aviation Capital, the world’s second-largest aircraft lessor, voiced concerns about the impact on the aviation industry’s confidence, especially as India was acquiring many new planes.
In October 2023, India amended its bankruptcy law to align with global rules, ensuring better financial support for its rapidly growing airline industry. This change aimed to adhere to the Cape Town Convention, which protects leasing companies’ rights worldwide, sparked by issues arising from Go First’s bankruptcy.
Subsequently, in a court filing on November 1, India’s aviation regulator addressed the need to retrospectively assess changes to the law, preventing leased aircraft from being frozen as assets during airline bankruptcies. This clarification could allow leasing companies to reclaim planes, particularly in cases like Go First, a struggling budget carrier.
