India's parliament passes landmark bill in boost for aircraft lessors

Abhijith Ganapavaram

Thu, Apr 3, 2025, 8:59 AM 2 min read

By Abhijith Ganapavaram

NEW DELHI (Reuters) - India's parliament connected Thursday passed a landmark aviation measure that volition marque it easier for planetary craft leasing companies to repossess jets and engines erstwhile a bearer defaults connected its payments, a large triumph for planetary lessors successful a cardinal market.

India's "Protection of Interests successful Aircraft Objects" measure volition afloat instrumentality the Cape Town Convention and Protocol, an planetary statement connected asset-based financing.

The contented has been successful absorption since 2023 erstwhile lessors similar SMBC Aviation couldn't repossess craft from India's Go First aft it filed for bankruptcy.

In that dispute, India's section laws superseded planetary craft leasing rules. But the caller measure changes that, bringing alleviation to lessors successful the world's fastest-growing aviation market.

Parliament approved the measure connected Thursday and India's president volition request to motion it into law, which is seen arsenic a formality.

"The authorities volition amended lessors' assurance successful the Indian marketplace and whitethorn besides marque it easier for upcoming airlines to lease aircraft," said Lovejeet Singh, a spouse astatine instrumentality steadfast Chandhiok & Mahajan who specialises successful aviation laws.

It volition bring down the outgo of leasing, which whitethorn construe into cheaper airfares, helium added.

In the Go First saga, lessors ran into difficulties successful repossessing implicit 50 Airbus aircraft, calling India a "risky jurisdiction" for craft leasing.

The country's carriers, led by biggest subordinate IndiGo, person placed orders for implicit 1,300 Boeing and Airbus craft since 2022, aiming to instrumentality vantage of a roar successful aerial travel.

India's aviation curate this week said the authorities was a "key measurement successful making craft leasing cheaper, benefiting airlines and passengers alike".

The bulk of craft operated by Indian carriers are connected lease, either nether elemental leases oregon sale-and-leaseback agreements.

(Reporting by Abhijith Ganapavaram. Additional reporting by Nigam Prusty and Tanvi Mehta. Editing by Aditya Kalra and Mark Potter)