Aviation Ministry To Protect The Interest of Aircraft Lessors

The aviation ministry of India recently gave relief to the aviation market by adding that the government is supposed to keep the confidence of aircraft lessors by reducing their risk. On Friday, the global aircraft manufacturing companies and leasing groups applauded a decision of the aviation ministry to protect the interests of lessors. The statement came along with the changes made to the earlier IBC (Insolvency and Bankruptcy Code) by the corporate affairs ministry on October 3, 2023, that allowed the lessors to acquire their aircraft during insolvency proceedings. The civil aviation ministry also added the earlier Insolvency and Bankruptcy Code regime was impacting agreements between the foreign lessors and Indian airlines.


The aviation ministry further added that the legal equities that are struggling with aircraft financing leasing estimate that Indian carriers spend $1.2 billion to $1.3 billion more in rentals due to difficulties in the recovery of aircraft. On October 3, 2023, the corporate ministry issued a notice to declare that they have imposed Section 14(1) of IBC which imposes a moratorium on the admission of insolvency plea but it will not apply to transactions, agreements, or arrangements related to aircraft, airframes, helicopters, and aircraft engines. Swipe down the page and read more details.

The civil aviation ministry said that the hindrance in possessing aircraft again for lessors could also lead to the reduction in the supply of aircraft to Indian airlines on favorable terms, which in turn can impact the entire aviation industry. While considering the possible repercussions of the earlier IBC regime which levied a moratorium on aircraft recovery, the ministry added, “Further, the cost of higher lease rentals could be passed on to the public, causing high fares on all routes. As such, there would be an overall impact on not only the aviation sector but all sectors dependent on connectivity like tourism, cargo,”

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The ministry asserted that the step is to stand on its commitment to the Convention to help the lessors or financing bodies when insolvency against the debtor commences. Meanwhile, the changes in the Insolvency and Bankruptcy Code have been accepted by the AWG (Aviation Working Group) which is a global watchdog representing aircraft makers and leasing firms. In its Cape Town convention, the global watchdog issued a positive watch list observance index with a projected increase in the score of India. However, earlier AWG downgraded India’s compliance score in September.

Amzad Khan
Amzad Khan

Hey there, guys. I am Amzad Khan. I enjoy writing on topics related to my interests in gaming and technology. My work has attracted a dedicated fan base thanks to the fresh and unexpected angle I bring to each piece.