India's parliament in New Delhi approved a new aviation statute that simplifies the method for international leasing firms to reclaim jets and engines when airlines default on their payments. The law, called Protection of Interests in Aircraft Objects, puts into effect guidelines set forth by the Cape Town Convention and its accompanying Protocol on asset financing. The updated regulation is welcomed by critics and is expected to boost trust among creditors operating in one of the fastest expanding markets for air transport.
The legislation emerged after a widely publicized incident earlier this year when leasing companies, including SMBC Aviation, experienced significant challenges retrieving aircraft from an airline that had declared insolvency. Local legal provisions previously took priority over international leasing standards, leading to extended disputes and added uncertainty for financiers. The passage of this law provides lending entities a clearer framework to recover assets, a move that is likely to have a lasting impact on the market environment.
Approval came on Thursday, and the measure is expected to become law following the president’s signature. Legal experts claim that the decision will improve confidence among global leasing firms and may open up new leasing opportunities for emerging airlines. They suggest that the clearer process could lower the costs of aircraft leases, potentially resulting in more competitive ticket prices for passengers. In recent years, major Indian carriers have ordered more than 1,300 aircraft from Boeing and Airbus to meet rising travel demand. With most aircraft operating under leasing arrangements, the updated regulation is anticipated to ease international asset recovery transactions, supporting a competitive climate for air travel within the country.
Industry experts believe clearer legal guidelines will encourage wider cooperation in leasing deals and stimulate airline expansion. Many leaders view this update as a beneficial advancement for lenders and travelers alike.
