Parliament passes Protection of Interests in Aircraft Objects Bill

Parliament on Thursday, April 3, 2025, approved the Protection of Interests in Aircraft Objects Bill, 2025 that will help reduce risks and costs for aircraft leasing by airlines in India, which is one of the world’s fastest growing civil aviation markets.
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Parliament on Thursday (April 3, 2025) approved the Protection of Interests in Aircraft Objects Bill, 2025 that will help reduce risks and costs for aircraft leasing by airlines in India, which is one of the world’s fastest growing civil aviation markets.

The bill was passed by the Rajya Sabha on April 1.

Replying to the discussion on the bill, Civil Aviation Minister K Rammohan Naidu said the bill will help improve the cost efficiency for airlines as well as in faster expansion of their fleets through leasing of aircraft.

Soon after passage of the bill in the Lok Sabha, Mr. Naidu said it marks a significant step in strengthening India’s position as a reliable and investment-friendly hub for aviation financing and leasing.

“By aligning with the Cape Town Convention & Aircraft Protocol, we are reducing risks and costs for aircraft leasing — ensuring a robust, globally competitive aviation ecosystem,” he said in a post on X.

In the House, Mr. Naidu also said there are not enough planes in India to meet the demand and the bill will help bring down the costs for leasing aircraft.

Citing data, the Minister said the country’s civil aviation sector has recorded 12% CAGR (Compound Annual Growth Rate) despite various challenges, including the grounding of Jet Airways and Go First.

He said the number of passengers, airports and aircraft with domestic airlines have more than doubled in the last ten years.

During the ten-year period from 2014, the number of passengers have more than doubled to 22.81 crore while the count of airports has jumped from 74 to 159. Also the number of aircraft with the domestic airlines has increased to more than 800, the minister said and added that over 1,700 aircraft are on order.

The Protection of Interests in Aircraft Objects Bill, 2025 will provide legal backing for the Cape Town Convention that mainly pertains to the leasing of aircraft.

There have been inconsistencies in leasing regulations for aircraft.

Under the Cape Town Convention, lessors can take back the possession of aircraft leased to airlines.

When Go First was undergoing an insolvency resolution process, there was a moratorium and lessors were not able to take back their aircraft leased to the airline. Later, an ad hoc arrangement was put in place allowing the lessors concerned to take their leased planes from Go First.

In September 2023, the Aviation Working Group (AWG) had cut India’s rating in terms of compliance with the Cape Town Convention as lessors faced difficulties in taking back aircraft that were leased to Go First.

India is a signatory of the Cape Town Convention, but it is yet to ratify the convention. Once the legislation is enacted, the Convention will get legal backing in India and ensure compliance with the international norms related to leasing of aircraft.

Participating in the discussion, BJP member and former civil aviation minister Rajiv Pratap Rudy said many airlines shut their operations in India in the last few years.

Lavu Sri Krishna Devarayalu of the TDP expressed concerns over the dominance of IndiGo and Air India while JD(U) MP Ramprit Mandal spoke about the high cost of aviation fuel.

Mandal also flagged concerns about the debt situation of many airline companies.

N K Premchandran (RSP) and Anil Yeshwant Desai (Shiv Sena, UBT) supported the bill.

Meanwhile, Naidu in his reply also said that the government is making efforts to promote Sustainable Aviation Fuel (SAF).