International Lease Finance Corp (ILFC), the plane-leasing business of insurance giant American International Group Inc, has asked India’s aviation regulator to deregister four aircraft leased to Kingfisher Airlines Ltd after termination of a contract. This happens shortly after Germany-based DVB Bank SE, the world’s largest aircraft financer, filed a case against Kingfisher for pending dues and taking back two aircraft, which are now in Turkey.
ILFC is also seeking return of the four aircraft, one of which was impounded by Indian tax authorities after the Vijay Mallya-led airline defaulted on payments. “We are examining the matter. Apart from deregistering, we will also have to issue export certification of airworthiness for those aircraft,” according to a senior civil aviation ministry official, who requested anonymity.
The Directorate General of Civil Aviation will take a decision on the matter.
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ILFC is the owner of six aircraft, whereas DVB has partly financed Kingfisher’s purchase of two planes. “As far as the DVB case is concerned, we are waiting for a court judgment, as it is one of the many financers for aircraft purchase,” said the official.
Being the owner of the aircraft, ILFC has an edge in the matter as India has signed the Cape Town Convention, which seeks to protect the interests of leasing companies. According to the convention, as soon as the lease period is over, the country is committed to return the aircraft to the concerned leasing company.
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“We will talk to tax authorities as CBEC (Central Board of Excise and Customs) can't impound planes leased to Kingfisher under the Cape Town convention,” the official said.
Prakash Mirpuri, a spokesman at Kingfisher, had said on December 11: “The detention of the aircraft is illegal and will send a wrong signal to companies that want to do business in India.”