By Anurag Kotoky
NEW DELHI, March 5 (Reuters) - India will make it easier for
leasing and finance firms to reclaim planes used by Kingfisher
Airlines, two government sources said, after
complaints that India was complicating the process.
Cash-poor and debt-hit Kingfisher, once India's
second-largest carrier by market share, has not flown for five
months and finance and leasing companies have warned that India
could be starved of the funding it needs to fuel aviation
industry growth if repossessing its planes is not made easier.
Germany plane financier DVB Bank SE has sued the
aviation regulator and Kingfisher to have two Kingfisher planes
it financed deregistered, allowing them to be flown elsewhere.
Kingfisher, which owes about $2.5 billion to banks, airports
and others, according to an estimate by consultancy Centre for
Asia Pacific Aviation, is reported to have 13 leased planes in
its fleet. The number of leased planes could not immediately be
confirmed with Kingfisher.
On Tuesday, the government sources said the ministry of
civil aviation had decided to try to help remove obstacles to
leasing companies' efforts to take back planes from airlines
that cannot pay, in compliance with international standards.
Those obstacles include overruling tax authorities, banks
and other creditors, which, desperate to recover their dues, are
trying take possession of any asset related to Kingfisher.
Last year, Indian tax authorities seized at least two planes
in Kingfisher colours, which were parked in Mumbai airport, even
though the planes were leased.
Minimising red-tape would also help the leasing companies.
Earlier this year, U.S.-based International Lease Finance
Corp (ILFC), one of the world's largest leasing firms, sent a
team to repossess planes from Kingfisher for unpaid bills.
The planes remained stranded by administrative hurdles and
problems getting them ready to fly, ILFC Chief Executive Henri
Courpron told Reuters in January.
DVB declined to comment on Tuesday, while ILFC was not
immediately available to comment. A Kingfisher spokesman did not
have an immediate comment.
Indian airlines will need 1,043 new passenger and freighter
aircraft valued at $145 billion by 2030 to satisfy rising
demand, Airbus said last year. Leasing and finance
companies are expected to fund most of those planes.
Separately, India's Director General of Civil Aviation, the
top aviation regulator, said he hoped to reach an amicable
settlement with DVB, Kingfisher and the Indian tax authorities
which took possession of two Kingfisher planes in a bid to
recover tax dues. A meeting on the matter is set for March 26.
"We are always willing to help the leasing companies. We are
committed to a solution," director general Arun Mishra told
Reuters, adding he did not exclude an out of court settlement.
Meanwhile, Jet Airways, India's No. 2 carrier, has
taken two ATR propeller planes previously operated by
Kingfisher, at a "competitive" lease rate, a company spokeswoman
said, without giving details on the lessor or price.
ATR is a joint venture of European aerospace group EADS and
Italian company Finmeccanica.