Exclusive! Is India Flouting the Cape Town Convention?

Neelam Mathews

Jan 4, 2012

The recently reported case of the Mumbai International Airport not permitting a lessor to take back its aircraft following non-payment of lease rentals by Kingfisher and DGCAs unwillingness/inability to deregister aircraft is not holding the country in good light.

“India being a signatory to the Cape Town Convention, needs to sort out its issues and ensure its leased assets are moved out,” said Kapil Kaul, who heads CAPA in South Asia in an exclusive to AerospaceDiary today. DGCA needs to value the treaty they have signed, he adds.

The idea of the treaty-we have covered from its inception years ago- was to iron out unclear areas. So with the Mumbai airport, for instance, wanting to holdback aircraft because it has not been paid by the airline is against the law, we learn. This is ofcourse not the only case pending.

DGCA as the regulator needs to exercise its right to ensure the airport does not follow the rule of jungle. “This is a grey area and reflects poorly on how our system works,” says Kaul.

Other Indian carriers –through no fault of their own- might soon find more paperwork and cash to shell out to lessors and insurers,  if these incidents go unnoticed. This seems a return to the 90s during the Modiluft days when aircraft were not returned giving lessors a few migraines. Please don’t tell us, we haven’t learnt our lesson as yet?

The Cape Town Convention that relates to matters specific to aircraft equipment is meant to facilitate the financing of aircraft by providing creditors with an internationally recognized set of rights in the event of a debtors default or insolvency and allowing creditors to register their interests in an international register to guarantee their claim against other parties.