IANS | 08 Oct, 2023
Global watchdog Aviation Working Group (AWG) has issued a positive
watchlist notice in their CTC compliance index with a projected increase
in India’s score, which comes as a positive step towards ease of
leasing/financing aircraft equipment to India’s commercial airlines such
as Air India, IndiGo, Spicejet and Akasa.
The development comes
in response to notification issued by the Central government, dated
October 3, 2023, providing that the moratorium under the Insolvency and
Bankruptcy Code, 2016 will not apply to aircraft, aircraft engines,
airframes and helicopters governed by the Cape Town Convention.
AWG,
a global watchdog representing aircraft manufacturers and leasing
firms, had put India on a watchlist with a negative outlook in May,
saying the country failed to comply with international aircraft
repossession norms after foreign lessors were unable to recover their
leased planes from Wadia Group-owned bankrupt airline GoAir.
The
government's notification to exempt transactions involving aircraft,
aircraft engines, and helicopters from the Insolvency and Bankruptcy
Code (IBC) was issued in consonance with India's international treaty
obligations as the country was a signatory to the Cape Town Convention
and it Aircraft Protocol (CTC).
The Cape Town Convention is a
global treaty designed to increase financing and leasing of aircraft,
engine and spare parts by reducing a lessor's risk and by enhancing
legal predictability in these transactions, including in the case of an
airline's insolvency or default.
