AWG Signals Caution despite Manufacturers’ New Aircraft Protection Bill in India

AWG views positively the Protection and Enforcement of Interests in Aircraft Objects Bill, 2024 in India but places India on the watchlist having regard to concerns regarding compliance and governance.

AWG’s Council has put India on a watchlist due to compliance governance issues, even after India’s score of 61, which is certainly lower than Pakistan’s score of 71, was deemed medium compliance. It is of utmost important to surface the fact that this body oversaw the introduction of new leasing and financial laws for aircraft manufacturers and lessors over the welcoming of the consideration bill.

Regardless, during January’s clearence on the Union cabinet, this bill intends to ease processes with respect to lessors defaulting on the recovery of aircraft and engines.  According to AWG, the bill, if passed into law, would make a huge step toward India's compliance on the Cape Town Convention (CTC), although in caution it noted that India still remains below average in overall compliance and governance.

AWG raised concerns regarding the insolvency cases of Go First, SpiceJet and Jet Airways, which surface enforcement insufficiencies. The grouping stressed on aligning domestic legal framework with global norms on enhancing the compliance and governance standing of the country.

Yet for AWG, every setback will turn for the better since the new legislation is bound to improve India's score in future assessments, with consequent increase in the attractiveness of the country to international aircraft lessors and financiers.

The Air Working Group, which comprises heavyweights like Airbus, Boeing, and Deutsche Bank, continues to keep vigil over the developments closely.