* Most of 17 deregistered planes to be returned to lessors
* ILFC cannot take back 2-3 planes due to litigation
* Airports must abide by international convention
* Lessors need to pay parking fees
By Anurag Kotoky
NEW DELHI, March 26 (Reuters) - Plane lessors will be
allowed to retrieve most of the deregistered aircraft they
leased to grounded Kingfisher Airlines, India's
aviation regulator said on Tuesday, easing worries that a
dispute with global financiers might hurt other Indian carriers.
Financiers have warned that failure to resolve the dispute
could starve India of funds needed to develop its aviation
Kingfisher, controlled by liquor baron Vijay Mallya, has
been grounded due to a cash crunch.
Lenders, airport operators and tax authorities are trying to
recover some $2.5 billion, but disagreement over which creditors
should take precedence has left jets stranded.
"We have decided that those aircrafts, which were
deregistered by DGCA, we should release them," Director General
of Civil Aviation (DGCA) Arun Mishra said following a meeting
with tax officials and airport operators.
Mishra said lessors will have to clear the parking charges
from the date of deregistration to the date they fly back the
However, lessor International Lease Finance Corp, a unit of
insurer AIG, will not allowed to take back 2-3 planes it
owns before settling a pending litigation, Mishra said.
"Only a few of them are under litigation. Airports have
filed a case. We will have to wait for that."
ILFC said on Monday it had successfully removed one of six
aircraft in Kingfisher colours but is worried about the others.
The fate of Kingfisher's jets is seen as an important test
of an international agreement known as the Cape Town convention,
designed to make it more attractive for leasing companies to
invest by duplicating U.S.-style repossession rights.
The Airports Authority of India is bound by international
convention to let the planes go to lessors, its chairman V.P.
Germany's DVB Bank said in December it had sued
India's aviation regulator and Kingfisher in order to have two
planes it financed for the troubled carrier deregistered, a
first step toward recouping its funds.
Kingfisher has 25 more planes, both owned and leased, but
there has been no request to deregister those, Mishra said.
Reuters reported earlier this month that India will make it
easier for leasing and finance firms to reclaim planes used by
Kingfisher, after complaints that India was complicating the
Kingfisher made no immediate comment.