8 cases filed against it
An international aircraft leasing firm and Civil Aviation Authority of Bangladesh have filed eight cases against GMG Airlines in connection with around Tk 150 crore the carrier owes them.
The Civil Aviation Authority of Bangladesh (Caab) lodged seven suits with lower courts while the Los Angeles-based International Lease Finance Corporation (ILFC) filed one with the High Court.
GMG Airlines, which stopped flying on March 30 last year, owes Caab Tk 134.42 crore in charges like landing fees, gate fees, navigation, cargo handling, refuelling, and security fees, Caab officials said.
Of the Tk 134.42 crore, GMG owes Shahjalal International Airport Tk 120.39 crore and Shah Amanat International Airport in Chittagong Tk 9.47 crore.
The ILFC in its case documents said the airline owes it Tk 14.18 crore for terminating the lease contract for an aircraft ahead of time.
A top Caab official said, “We had repeatedly asked the GMG to pay the dues, but the airline did not pay heed to it. So, we had no choice but to seek legal means to realise the money.”
On the Tk 134.42 crore it owes to Caab, GMG Managing Director Shahab Sattar said the principal amount was Tk 48 crore. “The amount the Caab is showing is surcharge and interest accumulated with the principal amount.”
On the ILFC case, he said they had paid all the dues until the lease deal was terminated in February, 2012, and that GMG even forfeited around $1 million deposited as security money.
“The ILFC’s case is nothing but a breach of contract,” he claimed, adding that at the end of the day the court would look into whether the ILFC leased out the aircraft soon after GMG had returned the plane.
If the ILFC leased out the aircraft to another airline, their claim for damages would be futile, Shahab added.
Sources said GMG had leased a Boeing 767 in 2010 from ILFC for six years. But it informed the ILFC in February 2012 that it wanted to terminate the lease agreement, as it was unable to make the payments.
The ILFC agreed on the termination of the deal only after an assurance from GMG that it would pay the full amount as per the lease agreement. GMG did not pay up, sources said.
Meanwhile, Shahab said they were now seeking to renew the Air Operating Certificate (AOC) so that they could resume commercial operation. “We are trying to reach an agreement with Caab to this effect.”
He hoped the airline’s operation would resume by December this year. “We are in talks with two investors, a Canadian and a Middle-eastern company.”
He, however, did not disclose the investors’ names.
“We have also filed a petition with the High Court against a ministry decision of curtailing 14 frequencies that were given to us,” Shahab added.
An official at GMG claimed that the money they owed to the Caab had started piling up from 2010 as the operation cost soared.
GMG started its commercial operation in 1998. After the global economic meltdown in 2007, and the price hike of jet fuel in the international market, the carrier started feeling the pinch.
Industrial conglomerate Beximco Group bought lion’s share of GMG in 2009.
In 2010, the airline raised Tk 300 crore through private placement as a primary step to go for the initial public offering (IPO) using the “book building” method. The method uses bidding for fixing the price of shares.
After a share market debacle in January, 2011, the government suspended the “book building” method, thwarting GMG’s plans to go for IPO.
Source: The Daily Star
