Lok Sabha passes Aircraft Objects and Coastal Shipping Bills

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

The  Coastal Shipping Bill is meant to regulate vessels engaged in trade within Indian coastal waters.

During the discussion on the Aircrafts Object Bill, which lasted around 3.5 hours, members across party lines supported the Bill, with some observations and concerns. Members said that since the new law will supersede the rest, this overriding effect is likely to lead to several challenges in the courts. Members, including NCP-SP member Supriya Sule, said that there should be a timeline for framing the rules.

Members also raised the issue of high air fares and urged the minister to set up new airports or new flight routes, or to operationalise the ones that have stopped.

The minister, in his reply, explained the genesis of the law. He said when SpiceJet defaulted on its payments to the lessors in 2015, the lessors wanted to take back the airplanes, which they were allowed to do within five days as per their own agreement. However, when they went to the Director General of Civil Aviation (DGCA), they were informed that there was no law allowing it to deregister a plane based on an agreement. The rules were changed to give DGCA the power. Once the  Insolvency and Bankruptcy Code (IBC) came into effect in 2016, it essentially meant that if the airline defaulted on its payments to the bank, they could keep the aircraft, which actually belonged to lessors.

In 2019, when Jet Airways encountered financial problems, the lessors took back the airplanes before the moratorium period started. However, when it happened with Go Air in 2023, the aircraft were not given back to the lessors.

The minister explained that the 2023 incident led to India’s score dropping in the Cape Town Convention compliance index, leading to higher premiums for Indian companies for leasing aircraft.

He went on to say that there was huge demand for civil aviation in the country, with Indian airlines ordering as many as 1,700 new airplanes.

On the Coastal Shipping Bill, Minister Sarbananda Sonowal said that with 11,098 km of coastline, there was a need to increase the share of coastal shipping in freight movement. Not only will it be cheaper, it will also be good for the environment, the minister said.

He added that despite the benefits, roadways account for 66% of freight movement, railways account for 31%, and shipping accounts for just 5%. He said that this legislation will make shipping more trade friendly, generate employment and income. He said that the low share of coastal shipping — compared to 40% in the EU — has a significant impact on pollution and congestion of key land routes.