A Complete Guide to The Protection of Interests in Aircraft Objects Act, 2025
Introduction
The Protection of Interests in Aircraft Objects Act, 2025 is a landmark piece of legislation designed to align India’s aviation financing laws with global standards. By implementing the Cape Town Convention (2001) and its Aircraft Protocol, the Act establishes a robust and predictable international legal framework for securing and enforcing rights in high-value aircraft objects like airframes, engines, and helicopters. Its primary goal is to facilitate asset-based financing, reduce risks for creditors, and ensure legal certainty in cases of default or insolvency, thereby making the Indian aviation market more attractive to international lessors and financiers.
Complete List of Sections
- Section 1: Short title and commencement.
- Section 2: Definitions.
- Section 3: Application of Convention and Protocol in India.
- Section 4: Power of registry authority to issue directions.
- Section 5: Obligation of debtor and creditor to an agreement.
- Section 6: Remedies on insolvency.
- Section 7: De-registration and export request authorisation.
- Section 8: Jurisdiction.
- Section 9: Provisions of Act to have overriding effect.
- Section 10: Power of Central Government to make rules.
- Section 11: Power of Central Government in respect of declarations.
- Section 12: Removal of difficulties.
Conclusion
The Protection of Interests in Aircraft Objects Act, 2025 represents a significant step forward for India’s aviation sector. By providing clear rules for de-registration, export, and remedies during insolvency, the Act enhances creditor confidence. This legal clarity is expected to lower borrowing costs for Indian airlines, encourage more leasing and financing activities, and ultimately support the growth and stability of the aviation industry in India by aligning it with internationally recognized best practices.
Frequently Asked Questions
What is the main purpose of The Protection of Interests in Aircraft Objects Act, 2025?
The primary purpose of this Act is to implement the Cape Town Convention and its Aircraft Protocol into Indian law. This creates a stable and predictable legal framework for financing and leasing aircraft, protecting the interests of lenders and lessors, especially if an airline defaults on its payments or becomes insolvent.
Who does this Act primarily affect?
This Act mainly affects airlines, aircraft leasing companies, banks, and other financial institutions involved in the financing of aircraft, airframes, and engines. It provides these creditors with stronger, more efficient remedies and greater security for their high-value assets.
What are ‘aircraft objects’ as defined by the Act?
Under this Act, ‘aircraft objects’ refer to specific high-value aviation assets as defined in the international Protocol. This includes airframes (for larger aircraft), aircraft engines, and helicopters that meet certain size or power specifications.
What key remedies does the Act provide to creditors?
The Act grants creditors powerful remedies in case of a default, including the ability to take possession of the aircraft object, procure its de-registration from the national aircraft registry, and export it from the country. These remedies are designed to be swift and efficient, reducing the financial risk for lessors and financiers.