NEW DELHI: Aircraft lessors will no longer need to fear their assets getting stuck in India for indefinitely long periods of time when an airline here goes belly up — something they witnessed in recent times from the Kingfisher fiasco in 2012 to GoAir closure two years back. India will soon have a law to ensure the interest of aircraft & engine lessors and be compliant with the Cape Town Convention that seeks to do the same with Parliament passing the Protection of Interest in Aircraft Objects Bill, 2025. This is expected to lead to lower leasing costs for airlines in India.
“The Bill builds on the framework of the Cape Town Convention of 2001, which aimed to simplify and standardise international leasing agreements. India formally adopted this convention in 2008, but gaps in legal enforcement led to higher leasing costs — typically 8% to 10% higher than other nations. With this Bill, India seeks to plug those gaps, providing legal certainty to aircraft financiers and reducing costs for Indian carriers,” a Govt statement said.
Passing the Protection of Interest in Aircraft Objects Bill, 2025 “is expected to further ease leasing processes, make India a more attractive destination for aviation investments, and improve the country’s compliance scores under the Cape Town Convention. These changes are essential for reducing airline costs and encouraging new entrants into the sector.” It added.
Union aviation minister Ram Mohan Naidu, who introduced this Bill, said after its passage: “For almost 65 years — from Independence to 2014 — the total number of passengers flying annually in India was (about) 10.4 crore. In just the next 10 years, that number has more than doubled to 22.8 crore in 2024. Similarly, the number of airports in India increased from 74 in 2014 to 159 in 2024, with two more ready to be launched soon.”
The number of aircraft has grown growing from 340 in 2014 to over 840 by 2024. “These figures show that civil aviation in India is not just growing—it’s booming. No other country has seen this level of aviation expansion in such a short period,” he added.
“The bill aims to align India’s aircraft leasing and financing ecosystem with global standards and marks a critical step in deepening investor confidence in India’s rapidly growing aviation market,” the Govt statement added.
“There was a vision behind this leap in civil aviation. There was a mission to fulfill that vision. And to make that mission possible, there was the guidance of our PM Narendra Modi. The kind of growth we are seeing today was made possible because of his leadership,” the minister said. This is the second major aviation reform passed under Naidu.