What happened?
As part of key reforms in India’s civil aviation sector, the Union Cabinet approved the Protection and Enforcement of Interests in Aircraft Objects Bill, 2024, on January 17, 2025. This bill aims to lower leasing and financing costs for Indian carriers, which is expected to reduce airfares. Currently, the majority of commercial aircraft in India are leased. The bill will now be presented to Parliament for approval.
Why it matters to India:
Once enacted, the bill will ratify the Cape Town Convention, a global treaty that secures the rights of lessors to repossess high-value equipment, such as aircraft, helicopters, and engines, in the event of payment defaults. Although India is a signatory to the convention, it has not yet been ratified by Parliament. This legislation will enable the Indian government to establish rules for implementing the convention and its protocols, boosting lessor confidence in the Indian civil aviation sector. Consequently, this is expected to lower lending costs and positively impact airfares.