March 15, 2013 ????? 0 Comments
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MUMBAI
In a damage-control exercise to prevent India?s image from being dented in the global market, the civil aviation ministry may issue a guidance to release all Kingfisher Airlines aircraft parked at Indian airports to international leasing companies.
The move comes in the wake of growing disquiet among major leasing companies over India?s refusal to hand over the aircraft and fears that much-needed aircraft finance would be stopped to Indian airline companies.
Civil Aviation Secretary KN Srivastava is in the process of issuing a letter to all airport operators in ?3-4 days?, directing airports to release aircraft that have been de-registered by the authorities and are no longer held by Kingfisher. ?This would happen very soon,? Arun Mishra, director-general of civil aviation (DGCA), told.
The ministry decided on this step after a meeting with interested parties and stakeholders, including the Airports Authority of India, or AAI, in Delhi about a week back.
Kingfisher Airlines ceased operations last year, following defaults on loan repayment to lenders and failure to pay salaries. The airline buckled under in October-November 2011, running out of cash and was forced to suspend operations. The airline could not find investors and DGCA was forced to suspend its licence in October last year.
The de-registration will decrease number of aircraft on Kingfisher?s air operating permit to 15. Experts said it will not be easy for the airline to restart operations any time soon.
In Larger Interest of Airline Cos
The Vijay Mallya-promoted airline owes Rs 450-500-crore to major airports in India. It has parked nearly 30 out of its 66 aircraft fleet in various airports, out of which, 15 have been deregistered.
Big leasing firms have been increasingly vocal in their complaints against Indian authorities for not letting them take their assets back. The AAI wanted Kingfisher to cough up its dues and refused to release the aircraft.
VP Aggarwal, chairman of AAI, told ET that AAI has agreed to release the 15 de-registered aircraft to their respective leasing firms keeping in mind the larger interests of the airline companies and the need to honour the Geneva Convention, of which India is one of the signatories.
?We do not want a major fallout with any leasing company. So we have agreed to the suggestion and a formal letter on this guidance will be issued soon,? Aggarwal told ET.
The head of aircraft leasing giant, International Lease Finance Corp, headquartered in Los Angeles, on Wednesday urged India should allow release of six aircraft that were held ?hostage? at various airports due to diplomatic disputes.
In January, the Delhi High Court had ruled in favour of ILFC, giving the firm the right to fly its aircraft out of the country. Despite this, ILFC chief executive Henri Courpron said the situation on the ground remained unresolved. DVB Bank, the largest transportation bank in the world, announced a suspension of all funding activities in December to Indian airline companies after the Kingfisher debacle.
Aggarwal added that AAI will now begin recovery proceedings against Kingfisher soon.
Kingfisher owes over Rs 240 crore to the Airports Authority of India alone.
?The move (of allowing lessors to re-possess aircraft), if it materialises, will be a big positive for Indian civil aviation. Not a soul in the aircraft financing world is keen to put in money in financing aircraft for Indian airline companies,? an official of a leading leasing firm with exposure to Kingfisher said. ?The Indian government has shot itself in the foot by allowing the situation to reach this far,? the official added.
An email sent to Kingfisher Airlines went unanswered. Sanjay Agarwal, CEO of the airline, did not respond to calls.
The Indian civil aviation regulator also said the government has not seen any viable plan from the airline despite its desire to resume operations.
By Web Editor
Tags: AAI, airline, India, Kingfisher Airlines, official, Rs
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