Will aviation disputes be easier to resolve?, Pg 12

Key Highlights

Protection of Interests in Aircraft Objects Bill, 2025

• Passed to streamline resolution of aviation disputes between lessors and airlines.

• Aligns India’s legal framework with Cape Town Convention & Protocol, improving access to aircraft repossession.

• Targets high-value aviation assets like aircraft, engines, helicopters.

Addressing Legal Gaps in Repossession

• Past delays in repossessing aircraft (e.g., Kingfisher, GoFirst) due to lack of legal clarity and complicated insolvency proceedings.

• Bill allows for quicker repossession in case of financial default, sidestepping prolonged litigation.

Impact on Leasing Industry

• Expected to reduce aircraft leasing costs by 40%, improving India’s ease of doing business ranking in aviation.

• Foreign lessors view this as a positive move but remain cautious due to India’s complex taxation system.

Economic Implications

• Enhances investor confidence and credit availability for Indian carriers.

• Could make India more competitive globally in aircraft leasing and aviation financing.

• Potential benefits for EXIM bank-backed aircraft financing and leasing hubs like GIFT City.

Analysis & Way Forward

• The Bill is a step toward legal certainty and global integration in aviation.

• To maximise benefits, India must also resolve taxation barriers and enable domestic leasing ecosystem.

Mains Mock Question:

"Discuss the significance of the Protection of Interests in Aircraft Objects Bill, 2025 for India’s aviation sector. What challenges must be addressed to ensure its effective implementation?"