Post TitleSix lessors of planes have invoked letters of credit (L/Cs) issued to them by banks in respect of aircraft leased to India's Go First Airways which filed for bankruptcy this week.

The airline owes financial creditors US$798 million and Go First says lessors have started actions against the airline to ground and repossess aircraft.

Lessors and financial creditors

Go First says it has received notices from lessors for termination of aircraft lease agreements as six of them have invoked L/Cs.

Central Bank of India, Bank of Baroda, IDBI Bank, Axis Bank, Deutsche Bank and UT Finance Corp are Go First's financial creditors.

"Considering the present financial situation of the corporate applicant, defaults to financial creditors would be imminent," the airline said in its bankruptcy filing.

Engine failures to blame

Go First joins Kingfisher Airlines, Jet Airways and several other Indian airlines to go bankrupt over recent years.

The company is blaming "faulty" Pratt & Whitney engines for the grounding of about half its fleet.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.