Mumbai: Aircraft lease rentals for Indian carriers will go up as leasing companies may opt for a re-possession risk insurance on planes leased to local companies, said Uday Nayak, chairman of Veling, a Mauritius-based leasing company.
Re possession risk insurance covers against loss due to non recovery of aircraft from the lessee and the need for such a cover is being felt after airport operators and service tax department held in custody Kingfisher planes upon termination of lease terms.
Recently civil aviation secretary K N Srivastava directed Airport Authority of India to release Kingfisher planes which were de-registered from records due to lease rental default. The government directive came in the wake of petitions filed by lessors and aviation finance companies including ILFC and DVB demanding the release of their planes. Wary of Indian government's actions and worried over heightened risk of business in India leasing companies are considering an insurance cover against such actions.
11/04/13 Aneesh Phadnis/Business Standard
