Air India obtains clemency in UK court for aircraft lease payments

LONDON: Air india obtained a pardon from a UK court, as it allowed India’s flag carrier time until early January to make payments in a case of unpaid fees of more than $ 17.6 million, and the judge accepted the “broad push “from the airline’s financial difficulties, especially due to grounding of flights during the Covid-19 lockdown.
Judge Simon Salzedo, however, issued a strong rebuke to Air India for its “unsatisfactory and impolite conduct” in relation to the case by not participating in the process in a timely manner.
The hearing, which was held remotely in the Commercial Court division here on Friday, involved unpaid fees of more than $ 17.6 million to China Aircraft Leasing Company Limited (CALC) as part of an aircraft lease for hire. And maintenance.
“I accept the general idea of ​​Air India’s presentation of the financial difficulties it has been facing along with the rest of the aviation sector and I also note that it has been making some payments to the lessors,” the judge noted, awarding Air India until January 11, 2021 to settle past due payments.
However, this extension is conditional on the airline paying in the amount already committed for the month of December, which amounts to a total of $ 5 million.
The lawyer for CALC, a global aircraft leasing company, had requested immediate payment and argued that Air India, being a state airline, can always seek funding from the Indian government and only seeks to delay the affairs of its client, who has been waiting almost a year for payments.
Air India, on the other hand, argued that it does not dispute that the claimant is entitled to receive payments for leased aircraft, but as a result of severe limitations in the airline industry, most of its aircraft have remained grounded. The airline claimed that while it had managed to work out rent and payment reduction plans with other lessors, discussions with CALC had been unproductive.
It urged the court until January 29 for payments in order to avoid disruptions to its operations in the UK and Europe, especially during the Christmas and New Years holiday period, which would further “hamper” its ability to payment.
The judge reached a compromise and gave Air India until January 11 to settle the outstanding amounts.
The state airline has been looking for a buyer for some time, as the government wants to ditch its 100 percent stake in Air India and low-cost carrier AI Express.