The Ministry of Civil Aviation in India is dedicated to reducing risks and ensuring the confidence of aircraft lessors in the country's aviation market [20891a65].
To address legal battles by aircraft lessors seeking to repossess planes leased to the grounded Go First airline, the government has exempted aircraft objects from the insolvency law moratorium. This exemption aligns with international treaties and conventions that India is a signatory of, such as The Convention on International Interests in Mobile Equipment [20891a65].
The civil aviation ministry has stated that the insolvency law's impediment was costing Indian airlines an additional $1.2-1.3 billion in lease costs, potentially leading to higher fares and impacting sectors dependent on connectivity. The notification provides clarity and certainty to the rights of aircraft creditors, including lessors, in the event of airline insolvency [20891a65] [0961b74e].
In another development, SpiceJet has reached a settlement agreement with Export Development Canada (EDC) to resolve outstanding liabilities amounting to close to $91 million (Rs 755 crore). Under the agreement, SpiceJet will pay the settlement amount and acquire full ownership of 13 EDC-financed Q400 aircraft. The liabilities stem from a loan acquired by the airline in 2011 for the procurement of 15 aircraft. This settlement marks a significant milestone in SpiceJet's financial restructuring efforts and will strengthen its balance sheet and operational capabilities [8da05af7].
Lockheed Martin subsidiaries Sikorsky Support Services and Derco Aerospace have agreed to pay the federal government $70 million for overcharging the Navy for aircraft parts. Sikorsky purchased parts from Derco at the cost Derco paid other suppliers, plus a 32% markup, and then billed the Navy for the price it paid Derco, in violation of federal regulations. The settlement resolves a lawsuit filed by a former employee of Derco under the whistleblower provision of the federal False Claims Act. The case dates back to 2011 and there was no finding of wrongdoing by Sikorsky or Derco Aerospace [41aa2b48] [d1560cc0].