Apex aviation regulator Directorate General of Civil Aviation on Tuesday deregistered 15 aircraft of liquor baron Vijay Mallya-owed Kingfisher Airlines (KFA).
The move will allow leasing companies to recover their aircraft from Kingfisher Airlines for defaulting on lease rentals.
Announcing the deregistration, DGCA Arun Mishra said he will discuss the issue with all affected stakeholders, including tax authorities, airport operators and other vendors.
Airport regulator, Airports Authority of India (AAI) has seized several of the 10 aircraft owned by KFA. The AAI has decided not to release the KFA aircraft till such time the airline clears its dues that it owes to AAI.
Some leasing companies like the German Aviation Bank (DVB) moved the Delhi High Court, which ordered that the lessors had a right over these aircraft.
Following the decision, aircraft lessor International Lease Finance Corp (ILFC) said it had successfully removed one of six Kingfisher aircraft — an Airbus A-321 stranded in India.
DVB has also demanded for deregistration of two more Kingfisher planes, when it met DGCA on Monday.
The two planes had been sent to Turkey for repairs and maintenance where DVB seized them. However, unless the planes were deregistered in the lessor country the German Bank cannot reclaim them and lease or sell them to other carriers.
Financially crippled Kingfisher owns 10 planes and another 15 are leased which are yet to be deregistered, AAI chairman VP Aggarwal said on the sidelines of a CII function.
The dispute over Kingfisher’s leased planes is seen as a major test of the Cape Town Convention, a global treaty to standardise transactions involving moveable property like aircraft including contracts of sale and leases. It provides legal remedies for default in financing agreements including repossession and the effect of bankruptcy laws.