AerCap says jet recovery dispute will hit Indian airline costs

<html xmlns=""><head><title>AerCap says jet recovery dispute will hit Indian airline costs</title></head><body>

Indian carrier at centre of dispute over jet repossession

Leasing firms unable to recover jets for 330 days

AerCap says dispute to hurt Indian firms, push up lease rates

By Tim Hepher and Aditi Shah

PARIS/DELHI, June 1 (Reuters) -India's fast-growing airline industry faces higher leasing bills and growing hesitation from financiers after foreign lessors were blocked from recovering jets caught up in the bankruptcy of Go First, the head of leasing giant AerCap AER.N told Reuters.

An Indian tribunal last month granted a request from India's sixth-largest carrier for bankruptcy protection, putting into effect a moratorium on its assets that prevents foreign aircraft lessors from taking planes out for almost a year.

In an interview, AerCap Chief Executive Aengus Kelly said the world's largest leasing company had earlier recovered planes from Go First, previously called Go Air, but called the court move "wrong and unfair" and warned of its wider implications.

India's bankruptcy rules allow a maximum of 330 days to find a resolution, failing which a court can initiate insolvency.

Lessors have argued such rules are only designed to cover assets the airline actually owns. They say the 2001 Cape Town Convention, which India has ratified but not fully implemented, overrides local law - something denied by Indian regulators.

"The airline doesn't own these assets," Kelly said. "The decision by the courts will cost Indian companies".

Aircraft lessors control about half the world's fleet including three-quarters of jets recently delivered to India.

AerCap's warnings come days after SMBC Aviation Capital, the world's second largest lessor, warned the stand-off could shake confidence in the world's fastest-growing aviation market.

India's aviation regulator has told the Indian tribunal that lessors' requests have been put on hold because local laws prevail over any international treaty signed by India.

India ratified the Cape Town Convention in 2008 but has yet to pass a law resolving conflicts with its bankruptcy code.

Civil Aviation Minister Jyotiraditya Scindia told Reuters in April a bill implementing the treaty was "very much in the works".

Kelly said new lease rates had already begun rising for airlines in India, which would now face a risk premium.

"We know that there are people who have pulled back from the Indian market a little bit in certain instances until they see a resolution of this," Kelly said.

"Hopefully, the Indian authorities will realise that this isn't the way forward and they will allow the lessors to take equipment out."


The UK-based Aviation Working Group, which monitors leasing practices, has put India on a watchlist with a negative outlook.

Standard Chartered's Pembroke Aircraft Leasing, CDB Aviation's GY Aviation Leasing and BOC Aviation 2588.HK have initiated proceedings to repossess planes from Go First.

India is a critical market for lessors, in which sale-and-leaseback deals accounted for 75% of plane deliveries from 2018 to 2022, compared with a global average of 35%, according to analytics firm Cirium.

But it has also been a challenging one with Go First following Kingfisher and Jet Airways - both of which went bankrupt over the last decade-plus. There are also growing concerns among some lessors about carrier SpiceJet SPJT.NS against which Aircastle has sought to initiate bankruptcy proceedings.

SpiceJet SPJT.NS has said it is in the process of reviving its grounded fleet and has "no plans whatsoever" to file for insolvency.

Reporting by Tim Hepher, Aditi Shah; Editing by Emelia Sithole-Matarise


Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.

Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.

Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.

Kami menggunakan kuki untuk memberikan anda pelayaran terbaik di laman web kami. Baca lagi atau tukar tetapan kuki.

Amaran Risiko: Modal anda dalam risiko. Produk yang menggunakan leverage mungkin tidak sesuai untuk semua individu. Sila lihat Pendedahan Risiko kami.