India today has the world’s third-largest and fastest-growing aviation market, one that is also a hotbed of dealmaking activity, as shown by Air India’s recent plan to purchase 470 aircraft from Airbus and Boeing for $70 billion. As a result, lawyers in the aviation space are finding themselves more in demand than ever.  

In February this year, Indian carrier Air India, recently acquired by the Tata Group, set the aviation world abuzz after unveiling deals for a record 470 jets from Airbus and Boeing. According to Reuters, the provisional deals, which included 220 planes from Boeing and 250 from Airbus, eclipsed previous records for a single airline.

The announcement spotlighted the abundant potential of India’s aviation sector, which has shown steady growth of late. In the last three year, the number of passengers carried by Indian airlines increased by 6.4 per cent as the government introduced 78 new routes. There has also been a substantial increase in the fleet size of the aircraft, from 620 to 765 aircraft, in the last five years. The Indian Maintenance, Repair and Overhaul (MRO) industry is currently pegged at $1.7 billion and is expected to reach $4.0 billion by 2031, registering an annual growth rate of 8.9 per cent.

Needless to say, the sector is creating significant demand for the legal industry, and the Air India deal is an ideal case in point. “The new fleet acquisition plan of Air India and, for that matter, all other carriers is bound to lead to increased business opportunities for the airlines and all related businesses involved in the entire supply chain,” says Atul Sharma, executive chairman of Link Legal. “This would logically lead to enhanced demand for legal services, for example, in the areas of purchase, financing/re-financing, leasing, acquisition, deal structuring, imports, registration, insurance/re-insurance, commercial contracting, tax advisory, regulatory compliances, restructuring, dispute resolution, passenger claims and more.”

Poonam Sengupta, a partner at JSA, points out that effective aircraft utilisation will be key to assessing the deal’s success. “At this stage, the focus should be on choosing the most viable model for financing the deal (for each of the 470 aircraft and which leaves enough bandwidth to ensure liquidity), i.e., either cash, equity, sale or leasebacks or a combination of all and understanding the legal and regulatory compliances for operating such aircraft in India,” she says. “In addition, the growth/ capacity additions enabled by this deal will also provide employment opportunities for Indian aviation professionals like pilots, cabin crew, etc. Hence, there is a need to utilise legal services/ advisory on aircraft leasing/ financing and corporate issues. This will also create demand for legal services/ advisory relating to employment matters in Air India.”


The Indian civil aviation sector is currently experiencing a robust demand, with growth expected to surpass pre-COVID-19 levels. While upgrading and modernising existing aircraft fleet is a step in the right direction, it could be a while, however, before India is able to establish itself as a regional hub like Singapore or various countries in the Middle East.

To achieve this goal, airlines and airports - both government-owned and private - must work together to create a seamless aviation network in India. “This would require building new airports in tier-I/tier-II under the Regional Connectivity Scheme, upgradation of the supporting infrastructure, training personnel, building good maintenance/ Maintenance Repair Overhaul (MRO) facilities in India, addressing structural challenges like high aviation turbine fuel prices. The success of the regional connectivity scheme would depend on the assessment of passenger traffic demand on those routes and cooperation between governments, local bodies, airport operators and airlines,” says Sengupta.

Sharma feels that if India has to become regional aviation hub it would require not only huge investments but also a dynamic regulatory approach by all stakeholders including the government. “Amongst many factors that had a negative impact on the airline business in the last few years is the uncertainty around international fuel prices with an inherent currency risk. This is a big impediment in the airlines ability to have a reliable business plan,” he notes.

Despite the growth, most lessors are cautious about setting up a base in India due to the legal hassles, say lawyers. “One of the other reasons why lessors are apprehensive to set up a base in India is also because of the time taken in litigation related to repossession of aircraft. For that reason, mostly contracts signed between Indian carriers and lessors are governed by other laws.,” says Sengupta. To resolve this issue, the government should aim to implement a law creating a system of fair legal procedures to provide for the repossession of aircraft and transfer of aircraft out of India in case of a financial dispute with an Indian airline, she explains.

India is a signatory to the Cape Town Convention and Protocol, an international treaty to resolve risks for aircraft lessors and financiers but has not yet passed a law to implement it. Tax is also another challenge the sector faces. The airline industry has been seeking the intervention of the central government to review the GST structure, which does not allow airlines to claim pass-through input credit for the GST paid on aviation turbine fuel.

“Besides fuel cost, engineering constitutes the second biggest area where airlines can innovate their procurement and regulatory compliance strategies. Other areas require industry knowledge and creative thinking from legal advisors advising the airlines, for example, familiarisation with cost-effective engineering practices (like maintenance contracts and securing the best maintenance reserve terms for leased aircraft). This is only an illustrative example, and there are many other operational areas where legal service providers can provide effective solutions to their clients,” says Sharma.


The aviation sector’s multi-dimensional growth is set to create higher demand for legal services in all areas, including aircraft financing and leasing, regulatory compliance, market insights, commercial contract, and policy decisions.

As the demand for legal services in the aviation sector increases, firms are preparing to expand their teams and practice to service their clients and remain competitive.

However, aviation law is a specialised branch of law, necessitating a comprehensive understanding of its interconnected aspects.

Take, for instance, this Air India deal for 470 jets. It is important to understand the multi-fold consequences of this deal. With the introduction of new types of aircraft in the Indian aviation market, such as Airbus A350 and Boeing 777X, regulatory compliances may require a re-look. Further, being the biggest transaction in aviation history, Sengupta explains that this deal will necessarily require analysis of legal issues related to leasing and financing aircrafts, FDI and RBI policies, complex commercial deals, and more.

To avail of the growth opportunities, law firms must stay updated on the latest developments and trends as that will impact legal work.

“We monitor and disseminate all regulatory updates to keep our team abreast of the sector’s developments. We achieve this through regular interaction with all stakeholders. We ensure that all our practice group members are updated with the technological advancements in the sector, for example, the proliferation of the new breed of aircraft like drones,” says Sharma.

Law firms are also addressing the gaps in the capabilities of their lawyers when it comes to specific skills and expertise.

Aviation law practice, being specialised and highly complex, requires legal professionals to understand the nuances of its technical and commercial aspects. Today in this competitive atmosphere, knowing the specific laws within aviation is not enough. It is equally important to understand the interplay of different fields of law with aviation laws, says Sengupta.

“In any event, continuous learning and keeping abreast with the latest developments is vital for all lawyers, within and outside the legal aviation industry. We at JSA make a conscious effort to inculcate our team with a habit of acquiring and passing on information for the benefit of our entire team and our clients,” she adds.


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