The world's second largest aircraft lessor, SMBC Aviation Capital, has warned that India's decision to block leasing firms from reclaiming Go First planes will jolt the market and spark a confidence crisis, legal papers show.
SMBC, along with firms such as Jackson Square Aviation and Bank of China Aviation, raised the alarm after a tribunal gave Go Airlines LtdA boom in traffic in the world's third-biggest aviation market prompted record jet orders but two major airline failures, of Kingfisher Airlines in 2012 and Jet Airways in 2019, have taken some of the shine off the market.
India is a critical market for lessors, in which sale-and-leaseback deals accounted for 75% of plane deliveries from 2018 to 2022, compared with a global average of 35%,Go First and SMBC, which also called the Indian airline's insolvency filing a "smokescreen" to defraud creditors and lessors, did not respond to a request for comment.
Such rents are, in most cases, already higher than in some other countries following the departure of Jet and Kingfisher, said the sources, who spoke on condition of anonymity.
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