New Bill Enhances Aircraft Leasing Protection in India

The Aviation Minister, Ram Mohan Naidu, recently introduced a new bill in the Rajya Sabha called the Protection and Enforcement of Interests in Aircraft Objects Bill. This bill was approved by the Union Cabinet back in January 2025.

What does this bill do? It gives aircraft leasing companies the power to take back planes if the airlines don’t pay their lease fees. Once this law is active, it will bring Indian laws in line with international rules for aviation and offer better protection for those companies. This is great news as it should attract more investments in aircraft leasing in India.

Here are some important points about the bill:

– Shorter Waiting Time: If a leasing company wants to get back a plane during an airline’s tough financial times, they only have to wait a max of 40 days instead of the usual 60 days. That’s faster than global standards.

– Pay Up First: Any airline wanting to get their aircraft back needs to settle any unpaid bills, like airport and fuel fees, within 60 days.

Why is this bill needed now? The urgency for this bill came about because of issues faced by Go First Airlines. A court decision made it hard for leasing companies to take back planes from Go First, leading to long legal struggles. Because of this, leasing costs rose for other airlines, and leasing companies grew wary.

The situation also led a global aviation group to lower India’s ranking in aircraft leasing safety. To fix these problems, the Ministry of Corporate Affairs announced that aircraft and their engines would be exempt from the mandatory waiting period.

Also, even though India agreed to follow the Cape Town Convention’s rules in 2008, there were no local laws to enforce these rules, which created conflicts. This meant that lessors weren’t fully protected, even though India committed to international agreements.