The government is considering implementing a two-month moratorium to ensure that aircraft of a bankrupt airline is not immediately taken away by lessors, the Economic Times (ET) reported on Wednesday.
The Ministry of Corporate Affairs (MCA) in October exempted aircraft, helicopters, and aircraft engines from moratorium under insolvency law, citing India’s adoption of the Cape Town global convention that allows airlines to retain leased aircraft for a maximum of two months in case of rental defaults.
However, as the civil aviation ministry’s planned Cape Town Convention Bill is yet to be introduced in Parliament, the MCA might advocate for a two-month moratorium on aircraft of insolvent airlines until the convention is formally adopted.
