Key Legal and Regulatory Developments in India’s Aviation Sector in 2024: A Year in Review and Outlook for 2025

India’s Aviation Sector Sees Legal Shifts and Regulatory Changes in 2024

Last year was a tumultuous one for India’s aviation sector, with significant legal shifts and regulatory changes shaping the industry’s trajectory for 2025. From court battles to restructuring efforts, airlines faced a myriad of challenges that will have lasting impacts on the sector.

At the center of these developments was the Go First liquidation, which exposed critical gaps in the country’s aviation regulations and set new precedents. The case concluded in January 2025 with the National Company Law Tribunal ordering liquidation, involving debts of approximately 110 billion Indian rupees ($1.27 billion) spread across banks, lessors, and other creditors.

The ripple effects of the Go First case led to substantial regulatory reforms, particularly regarding lessor rights. An October 2024 notification exempted aircraft from the moratorium period under the Insolvency and Bankruptcy Code, addressing criticism from global aviation stakeholders. However, India’s downgrade in its Cape Town Convention compliance rating by the Aviation Working Group highlighted the need for further improvements.

The government’s move to incorporate the Cape Town Convention into Indian law in early 2025 marked a significant shift in the country’s approach to lessor rights. The Protection and Enforcement of Interests in Aircraft Objects Bill aims to adopt the convention’s protocols, allowing leasing companies to reclaim assets from defaulting airlines more efficiently.

In addition to regulatory changes, 2024 saw significant consolidation in the sector, with Air India and Vistara’s merger creating a formidable full-service carrier. SpiceJet also underwent financial restructuring and legal challenges, showing resilience through settlements and financial innovation.

Looking ahead to 2025, the aviation sector is poised for increased leasing and financing activity, driven by major carriers’ expansion plans. The legal outlook includes expectations of growth in aviation financing and leasing activities, increased complexity in regulatory compliance, and continued evolution of initiatives like the GIFT City project.

Overall, the legal shifts and regulatory changes in 2024 have set the stage for a dynamic year ahead in India’s aviation sector, with stakeholders bracing for new challenges and opportunities in the ever-evolving industry.