File Photo: The tail fins of Go First airline, formerly known as GoAir, passenger aircrafts are seen parked on the tarmac at the airport in New Delhi, India, May 11, 2023. Image Credit: Reuters

Go Airlines India Ltd., which has been grounded for a year after filing for insolvency, risks having its entire fleet of aircraft repossessed in a further blow to any chances of a revival for the Indian carrier.

India's regulator, the Directorate General of Civil Aviation, deregistered the company's fleet of 54 leased Airbus SE A320neo aircraft, according to people familiar with the matter, who asked not to be identified because the matter is private.

The move, which is in line with a court directive given last week, opens the door for companies that leased planes to Go Airlines "- which re-branded as Go First in 2021 "- to now take them back. The carrier didn't own a single aircraft of its own, instead leasing aircraft from 14 companies including SMBC Aviation Capital Ltd. and GY Aviation Lease 1722 Co.

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Go Airlines' insolvency resolution professional and a spokesperson for the Ministry of Civil Aviation didn't respond to requests for comment.

Losing access to its entire fleet pushes the carrier even closer to the brink of collapse. Its chief executive officer quit at the end of November, saying he couldn't get the airline flying again and staff were looking for jobs elsewhere because they hadn't been paid for months. If Go ultimately fails, it would be the 12th Indian airline to do so this century.

"This substantially reduces the chances of revival," said Bishwajit Dubey, a former partner at Cyril Amarchand Mangaldas & Co. who has extensively worked on insolvency cases. As well as taking possession of the aircraft, lessors could lease them to another airline or even negotiate a fresh deal with Go Airlines if it ever emerges from insolvency, he said.

The company's flying license is the only remaining thing of value it possesses, said Nitin Sarin, a manging partner at Sarin & Co. and who represented the carrier's lessors in court. Liquidation is the most probable outcome unless it manages a "miracle" in completing its resolution process "- which would include inviting and accepting bids from prospective buyers "- by June, he said.

So far, there appears to be little interest in acquiring the airline. A consortium that includes SpiceJet Ltd.'s managing director Ajay Singh and Busy Bee Airways submitted a bid for Go Airlines in March. Jindal Power Ltd. "- Go's sole potential buyer under its insolvency resolution process "- has decided not to bid.