New aviation bill to reduce aircraft leasing cost and maybe airfares

The Aviation Ministry presented the Cape Town Convention-Centric Bill, legally known as the Protection of Interests in Aircraft Objects Bill, 2025, in Parliament on February 10th.  

The bill facilitates quicker aircraft repossession in case of defaults, reduces leasing, financing and operational costs for airlines, and promotes domestic leasing and financing options through GIFT City, Gujarat. It will implement the Cape Town Convention and Protocol provisions and boost the Indian aircraft financing industry.

The bill allows aircraft owners to reclaim their planes within two months of airline default or bankruptcy. It empowers the DGCA (Directorate General of Civil Aviation) to supervise the implementation.

Axis Bank became the first Indian bank to offer aircraft financing through GIFT City. It cleared a long-term USD loan for Air India’s leasing subsidiary, AI Fleet Services, to purchase 34 training aircraft.

Air India is discussing a multi-billion-dollar order of 30-50 widebody aircraft with Boeing and Airbus.

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