UK based aviation leasing watchdog Aviation Working Group has put India on a watchlist.
It cautions aircraft lessors, giving the country a negative outlook.
It says India violated global aircraft repossession practices in blocking lessors’ applications to take back aircraft.
This was done to protect struggling LCC Go First which was granted airline bankruptcy protection.
It means the aircraft cannot be repossessed as protected assets.
AWG’s negative outlook comes under the Cape Town Convention and is reduced from 3.5 to 3.
India’s decision sets a worrying precedent.
“The Go First insolvency proceedings are a material development that implicates Cape Town Convention compliance in India,” AWG said.
India’s move could affect lessors’ confidence in the market and push up leasing costs, it says.
