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India Changes Airline Bankruptcy Rules, in wake of jet leasing dispute
According to a government notification made public on Tuesday, India has changed its insolvency rules to make leased aircraft released from an exclusion period that begins to apply when an airline declares bankruptcy.
This could help to resolve differences between the country’s bankruptcy laws and international leasing regulations. According to the notification, some provisions of the Indian Bankruptcy Code will not be applicable to transactions involving helicopters, aircraft, and their engines and frames.
The notification comes at a time when Go Air’s lessors are involved in a legal dispute to reclaim their aircraft after the airline declared bankruptcy. Ramesh Vaidyanathan stated, “With this, India can hope to somewhat repair the reputation it has acquired as a risky country to lease aircraft and engines to.”
According to a source in the aircraft leasing business and an adviser to a global lessor, the Go First planes’ freeze would have an impact on new negotiations and force domestic airlines to pay larger deposits for leased planes or higher monthly rents.
The nation’s aviation secretary informed India in June that efforts were being made to address discrepancies between international aircraft leasing regulations and its domestic bankruptcy laws.
According to those engaged in the issue, during court procedures where the foreign lessors are attempting to reclaim their planes, it is likely that the implications of Wednesday’s announcement on the Go First case will be analyzed.
