AAI to release deregistered KFA planes after govt nod

Civil Aviation Ministry is yet to take a call on releasing the aircraft to the leasing companies

State-owned airport operator AAI will release the deregistered leased aircraft of grounded Kingfisher Airlines for the lessors to fly them back only after permission from the Civil Aviation Ministry.

"Being signatory to the Cape Town convention, we will release the deregistered leased planes of Kingfisher Airlines (KFA)," Airports Authority of India Chairman V P Agarwal told reporters today on the sidelines of a seminar here.

He said that the AAI, to which Kingfisher owes Rs 295.50 crore, would allow the lessors to fly their aircraft back after permission from the Ministry.

The Ministry is yet to take a call on releasing the aircraft to the leasing companies and the matter was under consideration.

The US-based aircraft finance company International Lease Finance Corp (ILFC) had asked India to release their six planes, sitting idle at Delhi, Mumbai and Chennai, after they were impounded by Service Tax department and others as Kingfisher Airlines failed to pay them their due taxes.

Earlier, ILFC had warned that India's failure to return leased planes to their owners when the airline cannot pay its bills could put the country's aviation growth at risk by scaring off funding.

Agarwal said service tax department and other government departments "had asked us not to release the planes, but we would release them in the larger interest of the aviation sector".

KFA, which started operations in 2005 but was grounded in October last year, is reeling under debts of about Rs 8,000 crore and a similar amount of accumulated loss.

Last month, KFA lenders decided to start the process of recovering Rs 7,500 crore outstanding loans from the airline.

Agarwal was speaking on the sidelines of thre seminar "Civil Defence Cooperation: Optimal Use of Air Space".