On Tuesday, the Rajya Sabha passed The Protection of Interests in Aircraft Objects Bill, 2025, which aims to give legal effect to certain international agreements in their application to India. The bill focuses on providing clarity and security to both lessors and lessees in the aviation sector.
What is the Protection of Interests in Aircraft Objects Bill?
The bill aims to implement international agreements, particularly the Convention on International Interests in Mobile Equipment (commonly known as the Cape Town Convention of 2001) and its Protocol on Aircraft Equipment. India became a signatory to these agreements in 2008. These international standards are designed to secure the rights over high-value mobile assets such as aircraft, helicopters, and engines, thereby ensuring greater legal clarity and uniformity across the aviation industry.
In his response to the debate on the bill, Minister of Civil Aviation Kinjarapu Rammohan Naidu highlighted that the legislation will address a long-standing grey area in the aviation sector. He emphasized that it would provide enhanced security for both lessors and lessees, as well as contribute to the overall stability of the aviation market, which has experienced confusion in this area for some time.
How will it help bring down airfares?
The bill is expected to provide much-needed clarity and security, particularly in the leasing industry, which is crucial for the aviation market. “With the bringing of this bill, definitely it is going to create a lot more clarity. We hope this is going to give a lot of push for the leasing industry, which is the need of the hour. There is an immediate need for this bill to be there in the industry,” Naidu said.
By establishing clearer legal frameworks and improving the security of aircraft leasing, the bill is expected to make aircraft leasing more accessible and cost-effective. This, in turn, could lead to a reduction in operational costs for airlines, potentially leading to lower airfares for passengers.
Key provisions of the bill
The bill stipulates that before a creditor can exercise any remedy in case of a default, they must notify the Directorate General of Civil Aviation (DGCA). The bill also provides creditors with specific remedies, such as the right to repossess an asset within two months or a mutually agreed-upon period, whichever comes first.
“The industry needs this bill today. It will significantly transform the aviation landscape of the country,” the aviation minister stated.
Naidu clarified that the main objective of the bill is to provide legal authority to the Cape Town Convention and its protocol. He explained that the purpose of bringing this Act is not only to give legal force to these international agreements but also to ensure that India adheres to both the Cape Town Convention and its Aircraft Protocol. By doing so, India commits to upholding its responsibilities as a signatory to the International Civil Aviation Organisation.
The bill was introduced in the upper house on February 10, 2025, and its passage marks a significant step in aligning India’s aviation sector with global standards, ultimately benefiting both the industry and consumers.
(With inputs from PTI)