✈️ Aviation & Legal Reform

🛫 Aircraft Leasing Bill 2024 – Lowering Costs and Elevating India’s Aviation Potential

India’s aviation sector is preparing for massive growth, with the expected acquisition of over 1,000 aircraft by the end of the decade.
To support this surge, the government has introduced the Protection and Enforcement of Interests in Aircraft Objects Bill, 2024, aiming to build a robust aircraft leasing ecosystem and align Indian law with global aviation standards.

🎯 Objectives of the Bill

• Safeguard lessors’ rights by allowing easier repossession of leased aircraft and equipment
• Reduce leasing costs, making air travel more affordable
• Enable smoother acquisition processes for airlines
• Support fleet expansion while boosting investor confidence

This Bill is a critical step toward India becoming a trusted global aviation hub.

🌐 Cape Town Convention – The Legal Backbone

If passed, the Bill will ratify the Cape Town Convention and its Aircraft Protocol. Though India is already a signatory, the Convention has not yet been ratified, limiting its legal enforceability domestically.

🗓️ Key Facts:

• Signed: 16 November 2001, Cape Town
• Jointly developed by:
  • ICAO (International Civil Aviation Organization)
  • UNIDROIT (International Institute for the Unification of Private Law)
• Focus: High-value mobile aviation assets like:
  • Aircraft airframes
  • Engines
  • Helicopters
• Problem addressed: These assets have no fixed location, creating legal enforcement issues across borders

✅ Benefits of the Convention

🛡️ Predictability & Enforcement

• Establishes a recognized international interest across all Contracting States
• Introduces a digital registration system for global transparency
• Reduces contract enforcement delay from 10 months to 2 months

💸 Cost Savings

• Lowers borrowing costs by reducing creditor risk
• Boosts investment in fuel-efficient, modern aircraft
• Airlines from member states are eligible for:
  • 10% discount on export credit premiums

✅ Examples of cost savings:

• Australian airline saved:
  • $330,000 on an ATR 72
  • $2.5 million on an Airbus A380

📈 Boosting India’s Ease of Doing Business

• Aligns India’s aviation laws with international leasing norms
• Addresses issues highlighted during the Go First crisis, where lessors faced delays in reclaiming aircraft
• Reinforces India’s commitment to transparent dispute resolution

🌍 Investor Confidence and Risk Reduction

• Assures repossession rights for global lessors
• Reduces high-risk premium currently added to leasing contracts in India
• Facilitates foreign investment in Indian aviation
• Builds trust with international financiers and aircraft manufacturers

🎫 Impact on Consumers

• Lower leasing costs → Lower operational costs → Lower airfares
• Airlines will have more flexibility in upgrading to modern, efficient aircraft
• Results in a more competitive and affordable flying experience for passengers

🕯️ When legal clarity meets financial confidence, the skies become open to all.