India is working on framing rules to make it easier for international aircraft leasing companies to repossess aircraft in a bid to lower lease rates. Lease rates to India carriers increased when leasing companies found it difficult to repossess aircraft from the country, especially in the case of Kingfisher Airlines when the Directorate General of Civil Aviation (DGCA) was unable to remove their aircraft from India’s fleet registry and allow them to be repossessed because of objections from other government departments that are owed money by the airline.
These obstacles occurred despite India being a signatory to the Cape Town Convention, which duplicates repossession conditions under Section 1110 of the US bankruptcy code.
Even though India acceded to the Cape Town Convention in 2008, it didn’t frame any rules under its own Aircraft Act, essential for implementing the accord. This is what is now being drafted.
India clarifies lessor aircraft repossession rules
