Air India gets reprieve in UK court over aircraft lease payments

Air India has obtained some reprieve from a UK court docket because it allowed India’s flag service time till early January to make funds in a case of unpaid dues of over USD 17.6 million, with the decide accepting the “broad thrust” of the airline’s monetary difficulties, particularly as a result of grounding of flights in the course of the Covid-19 lockdown.

Judge Simon Salzedo, nonetheless, issued a powerful rebuke to Air India for its “unsatisfactory and discourteous” conduct in relation to the case by not participating with the method in a well timed method.

The listening to, held remotely on the Commercial Court division right here on Friday, concerned unpaid dues of over USD 17.6 million to China Aircraft Leasing Company Limited (CALC) as a part of an plane lease settlement for hire and upkeep.

“I accept the broad thrust of Air India’s submission of the financial difficulties it has been facing along with the rest of the aviation sector and also note that it has been making some payments to the lessors,” the decide famous, as he granted Air India till January 11, 2021, to clear the overdue funds.

However, that extension is conditional on the airline paying within the already dedicated quantity for the month of December, amounting to a complete of USD 5 million.

The counsel for CALC, a world plane leasing firm, had sought instant fee and argued that Air India being a state-owned airline can all the time search funds from the Indian authorities and is simply looking for to delay issues for its shopper, who has been ready for almost a yr for the funds.

Air India, however, argued that it doesn’t dispute that the claimant is entitled to funds for leased plane, however on account of extreme constraints on the airline business, most of its plane have remained grounded. The airline claimed that whereas it had managed to strike hire discount and fee plans with different lessors, talks with CALC had been unproductive.

It urged the court docket for time till January 29 for the funds as a way to keep away from disruptions to its UK and Europe operations, particularly over the Christmas and New Year vacation interval, which might go on to additional “hinder” its capacity to pay.

The decide struck a compromise and has given Air India till January 11 to clear the sums excellent.

The Indian state-owned service has been looking for a purchaser for a while now as the federal government desires to divest its 100 per cent stake in Air India and funds service AI Express.