Airline Insolvencies And The Exemption From The IBC Moratorium

On October 3, 2023, the Ministry of Corporate Affairs issued a notification ("MCANotification") that exempted arrangements relating to aircraft, aircraft engines, airframes and helicopters from the moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 ("IBC"). This notification comes in the aftermath of the international aviation community's widespread criticism of the insolvency proceedings of Go Airlines (India) Limited ("Go First"), where aircraft lessors complained that the moratorium under the IBC was inconsistent with their rights under the Cape Town Convention/Protocol (defined below). This article discusses the context of the MCA Notification and its implications for airline insolvencies going forward.