Global Aviation Leasing Body, AWG Cuts India's Compliance Rating for the Second Time Amid Go First's Legal Battles

Radhika Bansal

26 Sep 2023

A global aviation leasing watchdog has for the second time cut India's compliance rating with international leasing laws and kept the country on a watchlist with a negative outlook amid a dispute between local airline Go First and its aircraft lessors. The move by the Aviation Working Group (AWG), a UK-based entity that monitors leasing and financing laws, comes as bankrupt budget carrier Go First is locked in a legal tussle with aircraft lessors seeking to repossess jets.

The courtroom battle started after Go First was granted bankruptcy protection in May. Under Indian law, that prevented lessors from recovering 50-plus grounded Airbus planes. The lessors have complained that critical plane parts are now corroding or getting "robbed". The AWG said 130 days had passed since the lessors' request to repossess their aircraft, more than double the maximum waiting period of 60 days according to India's obligations under the Cape Town Convention, an international treaty protecting the repossession rights of lessors.

India has ratified the Cape Town Convention but has yet to pass a law resolving conflicts with the country's insolvency and bankruptcy code, which is backed by parliament. "The prolonged failure to make remedies, including repossession and deregistration, available to creditors ... and provide for asset maintenance and value preservation ... negatively impact scoring," the AWG's notice said, warning of further rating downgrades. The AWG, a not-for-profit entity co-chaired by Airbus and Boeing, has reduced India's score to 2 from 3.5 out of 5.

Impact of the Negative Outlook

The negative outlook from AWG is under what it calls the compliance index, which addresses whether requirements under the Cape Town Convention are met in practice. This is the second such downgrade by AWG, which first placed India on a watchlist in May and assigned the country a negative outlook for its failure to process lessors' plane repossession applications before the freeze on Go First's assets.

The move could further hurt lessor confidence in the world's third-largest aviation market, warned AWG, whose members include major lessors and financial institutions such as Aircastle, BOC Aviation, SMBC Aviation Capital, Deutsche Bank, Goldman Sachs and Morgan Stanley. SMBC, the world's second-largest aircraft lessor, which also has some planes leased to Go First, warned in May that India's decision to block leasing firms from reclaiming the airline's jets would hit lessors' confidence in that market.

Meanwhile, Go First told a court that its revival could be derailed if it agreed to the demands of aircraft lessors who are seeking certain records after jet parts went missing or faced deterioration. Dubai Aerospace Enterprise (DAE) Capital and ACG Aircraft Leasing recently sought a Delhi court's intervention alleging the robbery or corroding of certain jet parts. 

In response, Go First said that it could be a time-consuming process that could impact its revival.  Such requests "have far-reaching implications on the day-to-day affairs of Go Air and will have a direct bearing on the going concern status of Go Air," said bankruptcy officer Shailendra Ajmera in court filings. He said that such “time-consuming exercises” would divert the resources of Go First.

Previous Outlook

The aircraft leasing watchdog, Aviation Working Group (AWG), has deemed that India has failed to comply with international aircraft repossession norms, and put the country on a watchlist with a "negative outlook." The issue arose following the bankruptcy of the ultra-low-cost carrier Go First, which ceased operations on May 3rd.

Part of the study by AWG focuses on compliance, addressing whether requirements under the Cape Town Convention, an international treaty on plane repossessions, have been met in practice. Following Go First's bankruptcy protection, India's score on the compliance index was downgraded from 3.5 to 3.

India is the world's third-largest aviation market, with the country's airlines undergoing significant expansion. Aircraft leasing will undoubtedly play a significant part in that expansion, but the rating by AWG could increase leasing costs for Indian carriers in the future, making further growth more challenging.

(With Inputs from Reuters)

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Air India Announces Codeshare Partnership With AIX Connect

Radhika Bansal

26 Sep 2023

Tata Group-owned Air India has entered into a codeshare pact with its subsidiary AIX Connect and initially, the pact will cover more than 100 flights a day on 21 routes. Codesharing allows an airline to book its passengers on its partner carriers and provide seamless travel to destinations.

"The codeshare implementation enables Air India guests to connect seamlessly on AIX Connect's route network to and from over 80 points across Air India's extensive domestic and international network," a statement said on Monday, September 25.

AIX Connect is in the process of being merged with Air India Express to create a single low-cost carrier within the Tata Group’s airline business. According to the statement, Air India will add its 'AI' designator code to over 100 flights a day operated by AIX Connect on 21 routes.

The agreement between the two airlines enables guests to receive their boarding passes at the first point of departure for all the travel sectors on a single ticket and have their baggage checked in through to their final destinations. Guests connecting from international to domestic flights will, however, need to clear customs at the first point of entry in India, in line with government regulations.

AIX Connect will honour the free baggage allowance mentioned on tickets issued by Air India. Air India guests connecting to flights operated by AIX Connect will also be able to enjoy complimentary meals on board.

"More routes under the codeshare agreement will be added progressively. Bookings for the codeshare flights are being opened across points of sale, for travel starting 27 September 2023," it said. With the latest codeshare pact, Air India has expanded its domestic route network to four new domestic destinations — Bagdogra, Bhubaneswar, Ranchi, and Surat — in addition to the common destinations between the two airlines' route networks. Customers from these originating cities will be able to connect to Air India’s international network over hubs in Delhi and Mumbai.

The codeshare agreement also enables AIX Connect to leverage Air India’s global distribution network via the airline’s direct channels as well as its global travel agency network. AIX Connect is a 100% subsidiary of Air India, which is in the process of being integrated with Air India Express (another 100% subsidiary of Air India) to ultimately form a single low-cost carrier within the Tata group’s airline business.

Interline Agreement with Vistara

Vistara has announced a bilateral interline partnership with Air India in May 2023. The partnership offers customers a seamless, end-to-end experience across the combined network of both airlines. With this partnership, customers will be able to book mixed itineraries on a single ticket across both airlines. They also receive their boarding passes for all the sectors booked on a single ticket at the start of their journeys and travel hassle-free as their luggage gets checked in through to their final destinations.

The airline already has an interline cooperation with Air India for irregular operations (IROPs) enabling both airlines to offer alternative first available options to their customers on each other’s flights to minimise inconvenience in case of any operational disruptions. Additionally, Vistara has interline through check-in agreements with 43 other airlines, of which it has Codeshare with Air Canada, British Airways, Japan Airlines, Lufthansa, Singapore Airlines, Swiss and United Airlines.

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What is Aircraft ULD in Air Transport?

Abhishek Nayar

26 Sep 2023

In the bustling world of global air cargo transport, speed and efficiency are paramount. Every day, more than 140,000 tons of freight, comprising a staggering 657 million merchandise items valued at 17.8 billion USD, are swiftly transported across the skies. Behind this logistical marvel lies a critical component - the Aircraft Unit Load Device (ULD).

Understanding Aircraft Unit Load Devices

An Aircraft Unit Load Device, or ULD, is a specialized container designed to group and secure cargo, mail, and baggage for air transport. ULDs come in various forms, either as aircraft containers or a combination of an aircraft pallet and a pallet net. These devices are an integral part of an aircraft's structure during flight, directly interfacing with the aircraft's Cargo Loading System (CLS). This integration is crucial for ensuring flight safety under all foreseeable circumstances.

Safety and Airworthiness

Given their role in aviation safety, the design, testing, manufacturing, operation, maintenance, and repair of ULDs are subject to stringent safety and airworthiness requirements enforced by civil aviation authorities. These regulatory measures ensure that ULDs meet the necessary standards to guarantee the safety of both the cargo and the aircraft.

Evolution and Contribution of ULDs

The journey of ULDs in air cargo began in the late 1950s, and they have been pivotal in enhancing the safety and efficiency of the air transport industry ever since. One of their primary purposes is to streamline cargo handling by allowing consignments to be unitized and grouped at cargo warehouses, reducing the need for manual loading and unloading of aircraft.

Protecting Cargo and Maximizing Efficiency

ULDs play a crucial role in protecting the contents they carry from loss and damage. Their design is meticulously crafted to maximize the utilization of aircraft contours, optimizing space and efficiency. Moreover, they facilitate the transport of special cargo, such as Temperature-Controlled Containers, Fire Resistant Containers, and even containers for livestock and garments.

Unique Challenge: Control Beyond Airline Supervision

In today's air cargo landscape, a significant portion of ULD operations is handled by third parties like Freight Forwarders and Ground Service Providers. Often, these operations occur off-airport and outside the direct supervision of airlines. ULDs are one of the few aircraft components that leave the control of the airline, returning after traversing multiple non-airline parties. Consequently, they have a significant impact on flight safety.

Certification and Standards

Airworthiness certification of a specific type of aircraft ULD is obtained from the governing Civil Aviation Authority (CAA) by the ULD manufacturer. This certification affirms that the ULD container meets the required minimum performance standards for installation on an aircraft.

IATA ULD Board: Promoting Standards

The International Air Transport Association (IATA) Cargo Services Conference (CSC) oversees the IATA ULD Board (ULDB). This body is responsible for developing standards, recommendations, and procedures related to ULD specifications, handling, restraint, and maintenance. The main source of these standards is the IATA ULD Regulations (ULDR), updated annually in consultation with industry stakeholders.

Advantages of ULDs

The benefits of ULDs are evident, making them a preferred choice for airlines. The elimination of manual loading saves time during aircraft turnaround and handling. ULDs also enable cargo transfer between aircraft, provided cargo is properly packed and matched to the receiving aircraft's requirements. Most importantly, ULDs secure cargo throughout the flight, preventing damage, maintaining aircraft weight and balance, and ensuring flight safety, especially during turbulence.

Types of ULD Containers

Various types of ULD containers cater to different aircraft types. The special purposes aircraft ULD such as Temperature-Controlled Container (TCC), Fire Resistant Container (FRC), Fire Containment Cover (FCC), horse stall, cattle stall, Garment on Hanger (GOH), etc., facilitate the transport of special cargo by air.

Some common examples include:

LD3: Suitable for Airbus widebody aircraft and Boeing 747, 777, and 787. Also used on smaller aircraft like the ATR 42, ATR 72, and BAe 146.

LD1: Wider than LD3, designed for Boeing 747 but often substituted with LD3 due to availability.

LD2: Fits the narrower fuselage of Boeing 767, making it more efficient than LD3 in this aircraft.

LD7: A double-width container used on Boeing 777 and Boeing 787.

LD3-45: Designed to fit the A320 family aircraft with standard LD3 dimensions but reduced height for smaller holds.


Aircraft Unit Load Devices (ULDs) are unsung heroes in the world of global air cargo transport. Their role in ensuring cargo safety, optimizing efficiency, and adhering to stringent airworthiness standards cannot be overstated. As the air cargo industry continues to evolve, ULDs remain a vital component, facilitating the rapid and secure movement of goods around the world.

With Inputs from IATA

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American Airlines Appeals Court Decision to End Alliance with JetBlue

Abhishek Nayar

26 Sep 2023

American Airlines has taken legal action against a U.S. District Court decision from September 25, 2023, which mandated the termination of its alliance with JetBlue Airways. The alliance, known as the "Northeast Alliance," had enabled the two carriers to collaborate on flight schedules and revenue sharing.

The court's ruling concluded that this agreement violated antitrust laws, prompting American Airlines to appeal the decision. This development comes in the midst of significant turbulence in the airline industry, with JetBlue's pending acquisition of Spirit Airlines also facing legal scrutiny from the Justice Department.


In May of this year, U.S. District Judge Leo Sorokin issued a ruling that sent shockwaves through the airline industry. Judge Sorokin found that the "Northeast Alliance" between American Airlines and JetBlue Airways raised significant concerns regarding competition within the industry. The alliance allowed the two carriers to coordinate flights in the Northeastern United States, which, according to Sorokin, could lead to reduced competition and increased fares for consumers.

American Airlines' Appeal

American Airlines has made the decision to appeal this ruling, asserting that the court's judgement fails to consider the potential benefits that the alliance brings to passengers and the broader industry. The airline contends that the partnership with JetBlue has led to more convenient flight options, improved schedules, and enhanced connectivity for travelers in the Northeast region. American Airlines also emphasizes that the alliance allowed them to compete more effectively with other carriers, particularly Delta and United, which have also formed strategic partnerships.

JetBlue's Response

In a surprising twist, JetBlue Airways has chosen not to appeal the court's decision, despite being a key participant in the Northeast Alliance. The decision not to appeal appears to be a strategic one, with JetBlue focusing its efforts on safeguarding its proposed $3.8 billion acquisition of Spirit Airlines. This acquisition, however, faces its own legal challenges, with the U.S. Justice Department raising concerns about potential antitrust violations in the budget airline sector.

JetBlue's stance suggests that it is prioritizing the completion of its acquisition of Spirit Airlines, which could significantly reshape the competitive landscape in the low-cost carrier market.

Impact on the Airline Industry

The legal battle between American Airlines and the U.S. District Court has far-reaching implications for the airline industry. The potential dissolution of the Northeast Alliance could disrupt travel plans for countless passengers in the Northeastern United States. Travelers have benefited from increased flight options, better schedules, and competitive pricing as a result of the alliance.

The broader context of this legal battle is also significant. It occurs within a period of intense consolidation and competition in the airline industry, as carriers seek to expand their networks and improve efficiency. The outcome of this appeal could set a precedent for future airline alliances and partnerships, influencing how airlines collaborate in the years to come.


American Airlines' decision to appeal the U.S. District Court's ruling to terminate its alliance with JetBlue Airways underscores the high-stakes nature of the airline industry. While the court's decision aimed to protect competition and prevent potential antitrust violations, American Airlines argues that the alliance benefits passengers and enhances its ability to compete effectively.

JetBlue's choice not to appeal, instead focusing on its acquisition of Spirit Airlines, adds another layer of complexity to this unfolding drama. The outcome of both legal battles will undoubtedly shape the future of the airline industry and the options available to travelers in the United States. As these legal proceedings progress, the industry and its stakeholders will be watching closely to see how the cards are ultimately dealt.

With Inputs from Reuters

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KLM Averts Pilots' Strike with New Labor Agreement

Abhishek Nayar

26 Sep 2023

KLM, the renowned Dutch flag carrier, has successfully prevented a potential pilots' strike through a recently reached outline agreement with the Dutch Airline Pilots Association (Vereniging Nederlandse Verkeersvliegers, VNV). The strike, which was scheduled for September 25, 2023, was called off following the agreement, signaling a positive turn in labor relations within the airline industry.

A Last-Minute Resolution

In a statement issued on September 24, 2023, KLM announced the breakthrough in negotiations, stating, "KLM and VNV reached an outline agreement on a new collective labor agreement for pilots on Sunday evening, September 24." This significant development spared travelers from potential disruptions and provided a ray of hope for a harmonious future between the airline and its pilot workforce.

The Details of the Agreement

While the strike has been averted, both KLM and VNV are not resting on their laurels. Over the next few days, they intend to refine the outline agreement further, with VNV planning to submit it to its Members' Council for approval. If ratified, this agreement will be effective retroactively from March 2, 2023, to February 28, 2025.

One of the primary focuses of this new agreement is compensation. Pilots can expect substantial pay increases, with the agreement stipulating an average annual wage increase of 5.5% over the two-year term, starting from September 1, 2023. Additionally, pilots will receive a 2% one-time payment to compensate for the delayed commencement of the collective labor agreement, which had initially ended in March 2023.

Improving Work-Life Balance and Productivity

Beyond financial considerations, the new agreement also addresses issues related to work-life balance and productivity. It is expected to allow pilots to plan their time off more efficiently, contributing to their overall well-being. Moreover, the agreement foresees productivity enhancements that are poised to result in higher revenues for KLM. The VNV even anticipates "hundreds of millions of additional revenues" as a direct result of this productivity growth.

Prioritizing Safety in Decision-Making

Importantly, the agreement reaffirms the commitment of both KLM and VNV to safety in aviation. VNV emphasized their involvement in decision-making regarding the potential introduction of flights with fewer pilots in the cockpit, underscoring that safety remains paramount in all circumstances.

A Positive Outcome for All Parties

In concluding statements, KLM expressed satisfaction with the agreement, stating, "We are happy that we were ultimately able to achieve this result through constructive consultation." On the other side, VNV conveyed its contentment that KLM had taken "the necessary steps to create a collective labor agreement that does justice to our reasonable wishes and proposals."


This development marks a significant step forward in ensuring a harmonious and productive working relationship between KLM and its pilot workforce. It also underscores the importance of open dialogue and constructive negotiations in the aviation industry, ultimately benefiting both passengers and airline employees.

As KLM and VNV work toward finalizing and implementing the agreement, travelers can breathe a sigh of relief, knowing that their future flights are less likely to be disrupted by labor disputes, while pilots can look forward to improved compensation and working conditions.

With Inputs from KLM, VNV

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Akasa Air Explores $400 Million Fundraising, Eyeing $1 Billion Valuation

Abhishek Nayar

26 Sep 2023

Akasa Air, India's youngest and environmentally conscious airline, is making waves in the aviation industry as it contemplates a substantial fundraising effort. According to sources familiar with the matter, the airline is exploring the possibility of raising up to $400 million in capital, a move that could propel its valuation to a staggering $1 billion. While this financial maneuver promises to boost the airline's prospects, it may also result in a reduction of the ownership stake held by the family of the late billionaire investor Rakesh Jhunjhunwala.

A Green Takeoff: Akasa Air's Ambitious Plans

Akasa Air, founded with a commitment to sustainability and innovation in mind, has swiftly emerged as a prominent player in India's aviation landscape. The airline's co-founder and CEO, Vinay Dube, has been instrumental in driving its vision of offering eco-friendly air travel options to passengers. With a focus on sustainability, efficiency, and passenger comfort, Akasa Air has garnered attention not only for its environmental initiatives but also for its commitment to providing a superior flying experience.

The Quest for Capital: $400 Million in Sight

Sources close to the airline have revealed that Akasa Air is actively exploring options to raise up to $400 million in capital. This infusion of funds could be a game-changer, pushing the airline's valuation to a remarkable $1 billion. This move reflects the airline's ambition to expand its operations, invest in cutting-edge technology, and further enhance its green initiatives.

A Potential Dilution: Impact on Jhunjhunwala Family's Stake

While the fundraising endeavor promises significant growth for Akasa Air, it might also entail a dilution of the ownership stake held by the Jhunjhunwala family. Currently, the family of the late billionaire investor Rakesh Jhunjhunwala owns a substantial 45.97% stake in the airline. However, indications suggest that the family is unlikely to acquire additional shares during this fresh equity issuance. Consequently, this could lead to a reduction in their equity ownership.

Phased Financing: Incremental Valuation Boost

The financing plan is expected to unfold in phases, resulting in a gradual increase in Akasa Air's valuation. This incremental approach is projected to raise the airline's worth from its current valuation of approximately $650 million to the coveted $1 billion mark. While the Jhunjhunwala family may not participate in the upcoming equity issuances, the funding is expected to attract interest from various investors keen to support the airline's growth trajectory.

Secondary Stake Sale: Exploring Options

To facilitate this fundraising initiative, the appointed banker is reportedly exploring potential purchasers for a secondary stake sale by the Jhunjhunwala family. This strategic move would provide an opportunity for other investors to acquire a share in Akasa Air, further diversifying the airline's ownership structure.

Ownership Breakdown

As per reports from Mint, the current ownership breakdown of Akasa Air is as follows:

  • Co-founder and CEO Vinay Dube: 16.13% stake
  • Madhav Bhatkuly: 9.41% ownership share
  • Sanjay Dube and Niraj Dube: Each holding a 7.59% stake
  • PAR Capital Ventures LLC: 6.37% ownership interest
  • Kartik Verma: 1.93% stake
  • Ninan Chacho: 1.07% ownership share
  • Remaining stakeholders collectively own 3.94% of the airline


Akasa Air's pursuit of $400 million in fundraising and a subsequent $1 billion valuation marks a significant milestone in the airline's journey. The commitment to sustainability, coupled with ambitious expansion plans, positions the airline as a key player in India's aviation industry. However, the potential dilution of the Jhunjhunwala family's ownership stake underscores the evolving dynamics within the airline's ownership structure. As Akasa Air charts its course towards a greener and more prosperous future, it is poised to reshape the aviation landscape in India and beyond.

With Inputs from Aviation A2Z