India: Transport

Airline insolvency presents a particularly difficult problem for insolvency law because the assets most critical to keeping the airline operational may not belong to the airline at all. Aircraft are frequently held under operating leases. When an airline enters insolvency, therefore, the resolution professional (“RP”) may be required to preserve the corporate debtor as a going concern while the aircraft lessor seeks to enforce its contractual and international-law rights to recover possession of its aircraft.

Aircraft maintenance reserve clauses and redelivery conditions are the two provisions most likely to trigger multi-million dollar disputes at the end of an aircraft lease agreement. This article examines the mechanics of Maintenance Reserve Funds, explores escrow versus lessor-retained custody structures, and provides detailed guidance on drafting quantified redelivery conditions that eliminate ambiguity when exposure is highest.

GPS spoofing poses a sophisticated threat to Indian civil aviation, manipulating navigation systems through fake satellite signals that can mislead aircraft off course. As incidents increase near...