Context: India is one of the world's fastest growing civil aviation markets. The Bharatiya Vayuyan Adhiniyam 2024, a legislative reform aimed at modernising India’s aviation sector, came into effect from January 1, 2025.
Relevance of the topic:
Prelims: Key facts about Bharatiya Vayuyam Adhiniyam 2024; Cape Town Convention Bill.
Mains: Detailed question on issues in aviation question.
About Bharatiya Vayuyam Adhiniyam 2024
- Objective: The Act is aimed at modernising India’s aviation sector by replacing the Outdated Aircraft Act of 1934.
- Major Features of the Act:
- Empowered Director General of Civil Aviation (DGCA): DGCA has been provided with expanded jurisdiction over aircraft design, manufacturing, maintenance and operations, ensuring a centralised regulatory framework.
- Establishment of Bureau of Civil Aviation Security (BCAS): It focuses on establishment of a dedicated body exclusively for security matters in the aviation sector, enhancing safety of air travel.
- Aircraft Accidents Investigation Bureau: Creating an independent body for the investigation of aviation accidents and incidents, promoting transparency and accountability.
- Streamlining leasing of Aircraft: will guarantee lessors rights to repossess their leased equipment.
- Emergency powers to Central government: It empowers central government to take immediate actions to address crisis like;
- Health pandemic affecting aviation
- Cybersecurity threats
- Situations requiring temporary suspension of air operations.
- Compensation and Appeal Framework: It allows individuals and organisations to seek compensation for damages caused by government actions in the aviation sector.
- Penalties for Non-Compliance: It includes monetary fines and other penalties on violation of aviation laws deterring companies and establishing a culture of accountability.
- Alignment with International practices: It harmonises India’s aviation laws with international conventions like ‘International Telecommunication Convention’, for the aviation sector.
- Encouragement for Domestic Manufacturing: By regulating the entire lifecycle of aircraft, the bill supports domestic production and maintenance, contributing to economic growth and self-reliance.
Cape Town Convention Bill
- Recently, the Union Cabinet has approved the Protection and Enforcement of Interests in Aircraft Objects Bill, 2024 (Cape Town Convention Bill). The bill will be tabled in the next parliamentary session for consideration.
- The proposed Bill will give primacy to the Cape Town Convention in case of conflict with any other domestic law, mainly the Insolvency and Bankruptcy Code (IBC), 2016.
- Aim: To make the process easier for aircraft leasing companies to seize the planes of airlines that miss rental payments.
- Significance:
- Allow the aircraft leasing companies to reclaim their planes from Indian airlines in case of default on rental payments.
- Presently, the expensive assets like aircraft and engines of lessors, get stuck in India when Indian carriers default on paying rentals.
- The lessors have to wage lengthy legal battles (in National Company Law Tribunal) to get their planes and engines back. E.g., the case of Wadia Group's erstwhile GoAir.
- Expected to boost lessors' confidence in the Indian civil aviation space.
- Expected to lower the lease rentals in India and help finance high-value mobile equipment, like airframes, helicopters and engines.
- Allow the aircraft leasing companies to reclaim their planes from Indian airlines in case of default on rental payments.
Cape Town Convention:
- CTC is a global treaty that guarantees the rights of lessors to repossess leased high-value equipment such as aircraft, engines, and helicopters in case of payment defaults.
- It was adopted at a conference in Cape Town in November 2001, under the International Civil Aviation Organisation (ICAO) and the International Institute for the Unification of Private Law (UNIDROIT).
- India is a signatory to the convention (since 2008), but the Indian Parliament has not ratified the same. Hence, Indian laws presently prohibit such recovery once a company initiates bankruptcy proceedings
Major issues in Aviation Sector of India
- Taxation challenge: The rejection of the proposal to include Aviation Turbine Fuel under the Goods and Services Tax regime means continued high tax on the fuel for the aviation sector.
- Pilot fatigue: The industry faces challenges related to shortage of pilots that leads to extended hours of service by pilots. Such practices compromise passenger safety and the wellbeing of pilots.
- Unsecure practices: Airlines violate safety protocols for landing by promoting Flap 3 landing instead of full flap landing, compromising with the safety of passengers.
- Import dependency: The airlines sector is overdependent on imports of equipment for airlines including critical spare parts.
- High operational cost: Airlines are burdened with high user development fees, landing charges and parking fees adding more to their operational cost.
- Infrastructure constraints: Major airports like Delhi, Mumbai, and Bengaluru operate at or near capacity causing delays and operational inefficiencies.
What more can be done?
- Include Aviation Turbine Fuel (ATF) under GST to reduce costs.
- Invest in airport capacity, especially in tier-2 and tier-3 cities.
- Develop India as a hub for aircraft leasing with tax incentives.
- Encourage adoption of AI, big data, and automation for efficiency.
- Enhance training facilities to address pilot and workforce shortages.
- Focus on improving passenger experience with better services and digital solutions.
Conclusion: The Bharatiya Vayuyan Adhiniyam, 2024 will foster indigenous manufacturing under Make in India, align with international conventions like the Chicago Convention and ICAO, and streamline regulatory processes. Hence, the Act is a major step to revolutionise India’s aviation sector, enhance safety, innovation, growth, and global compliance.