Kingfisher suspension raises question for lessors & financiers, could add to India's cost pressures

Kingfisher Airlines' suspension of operations has had a flow-on impact on the global leasing and financing sector, highlighting some of the challenges facing aircraft financiers and lessors in the Indian market and again raising concerns regarding regulatory safeguards for international investment in India.

The continued delays by the Indian Government to de-register Kingfisher-operated aircraft since it suspended operations in Oct-2012 is also expected to hurt other, still-operational, Indian carriers while also creating the impression that India is not adhering to the Cape Town Convention, of which it is a signatory.

ILFC and DVB Bank have been the most vocal about the challenges in the market, with both companies encountering ongoing and costly problems in repossessing aircraft previously operated by Kingfisher Airlines and only now making some (slow) progress on regaining access to their aircraft.