Mumbai: Aircraft lease rentals for Indian carriers will go up, as leasing companies might 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. Its need is being felt after airport operators and the service tax department held in custody Kingfisher’s planes upon termination of lease terms.
Recently civil aviation secretary K N Srivastava directed the Airports Authority of India (AAI) to release Kingfisher planes which were de-registered from the records due to a lease rental default. The government directive came in the wake of petitions filed by lessors and aviation finance companies, including ILFC and DVB, demanding release of their planes. Wary of the Indian government's actions and worried over the heightened risk of business in this country, leasing companies are considering an insurance cover against such actions.
12/04/13 Aneesh Phadnis/Business Standard
