The Rajya Sabha passed the Protection of Interests in Aircraft Objects Bill, 2025, on Tuesday, which seeks to implement international conventions on the leasing of aviation equipment. Civil Aviation Minister Kinjarapu Rammohan Naidu said the new Bill will provide a boost to the aircraft leasing industry. “We are leasing so many planes every year. Ireland has a big leasing industry, and Dubai and Singapore have taken a lead in this industry. In our Indian skies, 840 planes are operating, and 86.4% of those planes are in the leasing model today. Airlines are preferring to go into the leasing model, and they go to other countries and lease. So, our Prime Minister (Narendra Modi) thought we should have a leasing industry here…there was no legislation so far,” he said. The Bill seeks to give legal effect to certain international agreements in their application to India, which includes the Convention on International Interests in Mobile Equipment (also known as Cape Town Convention of 2001) and Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment. “In 2001, international leasing industries, airlines, governments…came together to do something on issues faced by the industry…the lessor, bank, airline are all in different countries, multiple jurisdictions. And in 2001, the Cape Town convention happened, and protocols were discussed. India took the opinion of the Law Ministry and the Cabinet ratified it in 2007, and we were a signatory to the convention,” he said. He, however, said that when airlines defaulted on payments or went bankrupt, there was “no proper legislation”. “The DGCA becomes the domestic registry…(the Bill) has created a provision…airlines have to periodically intimate the DGCA plane-by-plane on the dues to lessors. Lessors have to intimate the DGCA about their activity in the country…It has been a grey area for some time. The Bill will bring clarity,” he said. “We are bringing this Bill to give force of law to the Cape Town convention and protocols,” he said. In cases of a default, the Bill gives creditors certain remedies, including the right to take back possession of the asset within two months or a mutually agreed upon period, whichever is earlier. During the discussion, RS members raised the matter of rising airfares, demands for international airports in some areas, and for some airports to be given “point of call” status. On airfares, Naidu said, “Hundreds of things affect it, from fuel prices to leasing charges, maintenance. capping airfares and a one-stop approach is not followed by any country. We are trying to follow dynamic fare pricing.” Citing comments by carriers like Air India, Indigo and Akasa Air in favour of the Bill, he said, “Once by getting this Act into place, you’re reducing leasing cost by 8 to 10%. Now, these are costs which are going to trickle down to the passengers and the airfares also.”
