The Aircraft Objects Bill 2025 establishes a legal framework for aircraft leasing in India, aligning with international norms like the Cape Town Convention. It reduces leasing costs, promotes domestic leasing, enhances airline accountability, ensures quick asset recovery for creditors, and may lead to lower airfares for passengers.
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The Rajya Sabha passed the Protection of Interests in Aircraft Objects Bill 2025.
The Civil Aviation Minister introduced the Protection of Interests in Aircraft Objects Bill, 2025 to implement international conventions related to aviation equipment leasing, such as the Cape Town Convention of 2001 and its protocols to provides a legal framework for resolving disputes between lessors, airlines, and creditors in multi-jurisdictional scenarios.
The objective is to reduce leasing costs, encouraging domestic leasing industries, and ensure clarity in processes like debt recovery during defaults.
Why does India need this Bill ?
India needs this Bill because currently, there is no proper legislation governing aircraft leasing. Airlines lease planes from foreign countries due to the absence of a robust domestic leasing industry. About 840 aircraft operate in Indian skies, with 86.4% leased internationally.
Without clear laws, issues like airline bankruptcies or payment defaults created complications. The Bill addresses these gaps by making lessors, airlines, and regulatory bodies like Directorate General of Civil Aviation (DGCA) accountable through periodic reporting mechanisms.
Bill align with international standards
The Bill gives legal force to the Cape Town Convention of 2001 and its protocols on aircraft equipment. These agreements standardize rules across multiple jurisdictions where lessors, banks, and airlines operate. For example, if an airline defaults, creditors can reclaim their assets within two months or a mutually agreed period.
India ratified the Cape Town Convention in 2007, but lacked enforcement mechanisms -> By implementing the Bill, India aims to align with global practices.
The Bill benefits both passengers and airlines:
Role of the Directorate General of Civil Aviation (DGCA)
Under the Bill, the DGCA becomes the central registry for all aircraft-related activities. Airlines must inform the DGCA about dues owed to lessors periodically, plane by plane. Similarly, lessors operating in India must report their activities regularly
The system eliminates ambiguity and ensures accountability, making it easier to track financial obligations and resolve disputes efficiently.
Remedies for creditors in case of defaults
They can reclaim possession of the aircraft within two months or a mutually agreed time frame, whichever comes first.
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