The “Protection of Interests in Aircraft Objects Bill, 2025” was passed by the Rajya Sabha on April 1, 2025 .
Purpose:
The bill aims to implement the Cape Town Convention and Protocol to reduce aircraft leasing costs and boost the aviation industry .
Key Points:
- Benefits for Lessors and Lessees: The legislation is expected to create more security for both lessors and lessees in the aviation market, clarifying what has been a grey area .
- Reduced Leasing Costs: By enacting this legislation, Air India anticipates an improvement in India’s compliance score with the Aviation Working Group (AWG), potentially reducing aircraft leasing costs by approximately 8 to 10 percent .
- Attracting Investment: The bill is intended to give protection to security interests, which will make banks more comfortable financing aviation assets .
- Role of DGCA: The Directorate General of Civil Aviation (DGCA) will maintain the registry of aircraft, and airlines will be required to regularly update the DGCA on pending dues along with details of lessors. Lessors will also need to continuously inform the DGCA about their activities in the country .
- Sale and Lease Back (SLB) Model: The bill also addresses the Sale and Lease Back (SLB) model, which is a financial agreement where an organization sells its assets to another party and simultaneously leases it back .
- Clarity and Security: Minister of Civil Aviation Kinjarapu Rammohan Naidu stated that the legislation would bring more clarity and security to the aviation market and provide a push to the leasing industry .
