AerCap says jet recovery dispute will hit Indian airline costs

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. AerCap CE 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.<br/>