Bureaucratic inertia at India's National Company Law Tribunal (NCLT) has hindered a bid by engine lessors with assets placed at Go First (GOW, Mumbai International) to get them back. On May 13, the NCLT adjourned any decision until July 11 at the earliest, saying it needed to study a recent Delhi High Court decision ordering the Directorate General of Civil Aviation (DGCA) to deregister all Go First aircraft and return them to their lessors for export.

Sixteen entities, among them aircraft lessors, engine lessors, and other creditors, had their various Go First applications mentioned by the Delhi bench of the NCLT. The applicants sought orders and directions and the court scheduled them into a single session. Among the engine lessors on the daily court docket were SMBC Aero Engine Lease B.V., Engine Lease Finance B.V., and SMBC Afro Engine Lease B.V.

Counsel argued that because the engines were connected to aircraft that were deregistered, the engines must also be deregistered. However, the April 26 Delhi High Court order did not include engines in its ruling because their lessors had not petitioned that particular court.

The NCLT said it needed more time to make an appropriate ruling under the Corporate Insolvency Resolution Process that is in line with the High Court ruling. It remains unclear why the engine lessors took this argument to the NCLT, which handles insolvency matters, rather than the court, which handles procedural matters such as deregistration orders. To date, the NCLT has been reluctant to step outside its defined role in airline insolvency matters.

Meanwhile, the DGCA told India's MoneyControl news outlet that it was considering permanently revoking Go First's local airport slots and international flying rights. The government agency has already temporarily assigned Go First's 2024 Northern Summer and 2024/25 slots to other carriers and is reportedly set to formalise this into a permanent arrangement by the end of the month.

Indian regulations stipulate a carrier must use 80% of its allocated slots within a 12-month period or risk losing them. Go First filed for insolvency and halted its operations in early May 2023. The agency is also preparing to strip the airline of its right to fly to Oman, Dubai International, Thailand, Abu Dhabi International, and Singapore Changi, citing the same use-it-or-lose-it provisions.

The loss of slots and international flying rights further devalues the insolvent airline, which the committee of creditors and resolution professionals still hopes to sell. However, what remains of Go First is now likely to be liquated.