flybig (FLG, Indore) has rebutted media reports it has engaged in fraudulent conduct concerning an aircraft lease escrow account. According to the Hindu Business Online outlet, Vman Aviation Services IFSC Private Ltd and Mumbai-based YES Bank filed separate fraud complaints in December 2023 against Big Charter Private Limited, d.b.a. flybig, alleging it had facilitated an unauthorised transfer of over INR80 million rupees (USD963,124) from the account using falsified paperwork.
flybig denies the allegations, and ch-aviation does not assert any wrongdoing on the airline's part, only that the lessor and bank made the complaint. In a January 11, 2024, statement, flybig chairman Sanjay Mandavia acknowledged the existence of the complaint but rejected "reports erroneously insinuating flybig's involvement in financial fraudulent activities."
flybig debuted in late 2020 with ATRs and a DHC-8-Q400 wet-leased from SpiceJet (SG, Delhi International), with the aim of linking India's Tier 2 and 3 cities and capitalising on the Indian government's UDAN scheme, which subsidises such flights. However, in November 2023, flybig suspended flights after Vman repossessed the two ATR72s it has placed at the airline, VT-TMC (msn 1364) and VT-TMT (msn 1385).
In its complaint, Vman claims flybig told it that they had not received promised funding from the Indian government to operate certain allocated UDAN routes. After a lengthy delay, Vman made inquiries with flybig's bankers, YES Bank, and allegedly discovered that the government had made the payment/s into the nominated escrow account, but flybig had transferred the funds to its account. Vman's complaint alleges the transfer involved using fraudulent documents and forged signatures.
The newspaper reports that YES Bank has reportedly filed its own complaint with agencies about the matter, while the Vman complaint states that some YES Bank employees were involved in the alleged misconduct. The outlet reports an unnamed flybig official calling the claims "bogus, baseless, fabricated and a deliberate attempt to harass, intimidate and threaten the newly launched airline, trying to establish itself in this close-knitted, yet competitive Indian aviation industry."
Two months ago, ch-aviation reported that Vman had repossessed both ATR - Avions de Transport Régional turboprops. The lessor told ch-aviation that this was due to contractual defaults. Mandavia says "flybig was further surprised to learn that the aircraft ATR72-600, along with almost its entire flying crew, was transferred to another company."
"This development raises concerns and prompts speculation that it could potentially be a preplanned, well-thought conspiracy to undermine competition within the UDAN project," said Mandavia. "flybig, having made significant strides in successfully implementing the project and demonstrating a robust commitment to enhancing connectivity in the North East region of India, is disheartened by these unexpected events."
The chairman says discussions are underway with other lessors and aircraft suppliers to acquire eight aircraft this year, although he did not provide further detail. He says flybig remains "resolute in its pursuit of organizational growth."
