India allows lessors to repossess Kingfisher planes

Kingfisher's 15 planes have been deregistered by the Indian civil aviation regulator DGCA paving the way for global leasing companies to take them back and easing worries that the dispute might hurt purchases by other Indian carriers. The move comes a day after officials from German bank DVB, one of the largest global aviation financing banks, met DGCA chief Arun Mishra to press for deregistration of the two aircraft.

Unless a plane is derigistered in a lessor country, it cannot be reclaimed or leased to other carriers. The two planes were sent to Turkey for repair and maintenance where DVB seized them. But since they were yet to be deregistered the aircraft could not be sold to other carriers.

DVB even sued the aviation regulator and Kingfisher to have the two planes deregistered. The German bank has moved the Delhi High Court over the issue and the court was to take up the matter for hearing on April 8. Cash-poor and debt-hit Kingfisher 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.