Protection and Enforcement of Interests in Aircraft Objects Bill 2025

Protection and Enforcement of Interests in Aircraft Objects Bill, 2025

Learn about the Protection and Enforcement of Interests in Aircraft Objects Bill, 2025—its key provisions, impact on aviation security, and how it strengthens rights related to aircraft ownership and financing.

Context: Recently the Minister for Civil Aviation tabled the Protection and Enforcement of Interests in Aircraft Objects Bill, 2025 in the Rajya Sabha.

Cape Town Convention (CTC) – 2001

CTC is an international treaty that standardizes transactions involving:
- Movable property such as aircraft, engines, and helicopters
- Legal protection for creditors, financiers and lessors
- Rules for asset recovery during airline defaults or insolvencies

India’s Status in CTC

Signed in 2008 but not ratified, so the provisions are not legally binding.
The Protection and Enforcement of Interests in Aircraft Objects Bill, 2025 aims to bridge this gap.

Key Provisions of the Protection and Enforcement of Interests in Aircraft Objects Bill, 2025

Legal Implementation of CTC in India

Section 3: The Convention and Protocol shall have the force of law in India.
The Directorate General of Civil Aviation (DGCA) will be the regulatory authority for implementation.

Responsibilities of Debtors (Airlines)

Airlines must maintain and submit records of dues related to aircraft and engines.
Ensures transparency in financial transactions between airlines and lessors.

Rights of Creditors (Lessors & Financiers)

Creditors can exercise asset recovery rights under CTC.
Before taking action, the DGCA must be notified about any airline default.

Handling of Aircraft During Airline Insolvency

The resolution professional can keep aircraft assets for 60 days, provided that usage and maintenance charges are paid.
This provision is controversial as the aircraft leasing industry prefers immediate asset repossession.