(Summary: While aircraft engines often account for the majority of an aircraft’s economic value, Indian regulatory framework under the DGCA registers only the composite airframe. During airline insolvency, the lack of an independent domestic engine registry forces a de facto doctrine of accession, entangling foreign engine lessors in lengthy litigation to repossess their standalone assets.)

The Dual Nature of Aircraft Assets: Airframe vs. Engine Sovereignty

It is commonplace to view an aircraft and assume that the airframe, given it contains the passenger-facing elements such as the cabin, seats, and overall airline product is the star of the show. However, the reality is vastly different: the airframe is only part of the asset. The engines of an aircraft play a vital role in aviation industry.

When the Wright brothers achieved the first sustained, powered flight in 1903, the true engineering marvel was not just their wooden airframe, but the custom-built, 12-horsepower aluminium engine they bolted onto it to obtain the airspeed to beat gravity. Over the next century, as aircraft evolved from fragile canvas biplanes to the sleek, metal commercial liners of the jet age, every structural leap was unlocked by an evolutionary jump in propulsion, moving from piston engines to the paradigm-shifting turbofans of the 1950s.

Today, modern aircraft engines are no longer mere accessories; they are highly capital-intensive, sovereign technological marvels that dictate an aircraft’s range, carbon efficiency, and economic viability. In most instances aircraft engines may have more value than the airframe itself.

International Legal Framework: Cape Town Convention & The Engine Definition

To a layman, an engine’s definition may seem straightforward. Oxford, for instance, simply describes an engine as ‘the part of a vehicle that produces power to make the vehicle move.’ However, the Convention on International Interests in Mobile Equipment and its Protocol on Matters Specific to Aircraft Equipment (collectively, the ‘Cape Town Convention’ or CTC (2001)) provide the most critical definition of an “aircraft engine”. The Protocol defines an “Aircraft Engine” as:

“…aircraft engines (other than those used in military, customs or police services) powered by jet propulsion or turbine or piston technology and:
(i) in the case of jet propulsion aircraft engines, have at least 1,750 lb of thrust or its equivalent; and
(ii) in the case of turbine-powered or piston-powered aircraft engines, have at least 550 rated take-off shaft horsepower or its equivalent, together with all modules and other installed, incorporated or attached accessories, parts and equipment and all data, manuals and records relating thereto;”
Under Article 16 of the Cape Town Convention, the treaty establishes a single, centralized, electronic global database called the International Registry (IR), operated by Aviareto in Dublin, Ireland. To protect these massive financial investments, the Aircraft Protocol explicitly allows creditors to register an ‘International Interest’ in an aircraft engine on the IR using three specific unique identifiers: (1) Manufacturer’s name, (2) Model designation, and (3) Manufacturer’s Serial Number / Engine Serial Number (MSN/ESN).

The Doctrine of Accession vs. Engine-Swapping Operations

Even though an engine carries its own independent registration on the global stage via the International Registry, whether it maintains a distinct legal identity within a specific domestic jurisdiction is entirely dependent on local property law.

In some legal jurisdictions, the doctrine of accession applies, where one piece of property becomes a legal part of another, larger piece of property. Under this doctrine, if an engine is attached to a particular airframe, it is legally treated as an appendage of that airframe rather than an independent asset.

This legal complexity is further compounded by daily operational realities. Typically, an airline leases an aircraft as an operational package (including its engines) from an aircraft lessor. However, once in service, engines are routinely removed and swapped across different hulls for maintenance, operational efficiency, or fleet optimization. Furthermore, airlines frequently lease spare engines from specialist engine lessors, which are then installed on airframes owned by entirely different lessors. Consequently, an engine owned by Lessor A frequently operates on an airframe owned by Lessor B.

The Indian Regulatory Vacuum: DGCA Framework and Insolvency Realities

In India, the Directorate General of Civil Aviation (DGCA) handles aircraft registration through a singular, composite lens, registering only the overarching airframe rather than maintaining an independent domestic registry for individual engine serial numbers.

During an airline’s insolvency, this administrative vacuum effectively forces a de facto doctrine of accession upon lessors. Because public regulatory records treat the aircraft as indivisible, clear property lines recognized under international common law become blurred, leaving engine creditors caught in severe crossfire.

During insolvency proceedings, foreign lessors attempting to repossess their property run headfirst into the ‘engine-swapping’ dilemma. A lessor utilizing an Irrevocable De-registration and Export Request Authorisation (IDERA) to repossess an airframe often discovers that its proprietary engine has been physically installed on a grounded hull owned by another lessor. This exact contentious scenario played out before the High Court of Delhi during the Go First insolvency proceedings.

Without a localized engine-level tracking ledger, the DGCA and customs authorities cannot independently clear a standalone engine for export or command its physical detachment from a disputed hull. This leaves foreign asset owners trapped in protracted legal disputes before Indian courts merely to isolate and retrieve their property.

A lessor with no administrative remedy: a recent example

This problem is not theoretical. It is an immediate, practical crisis. At a recent conference, we were approached by a foreign engine lessor with a blunt question. Without a proper domestic engine registration system in India, how could they safely pull their assets out if a lessee defaulted?

Their lessee, an upcoming Indian airline, had stopped paying rent. An airframe lessor in that position can trigger an IDERA and rely on a strict five-day de-registration window. An engine lessor has no equivalent administrative remedy at all. And so, the engine lessor is left with no choice but to rely entirely on the Indian judiciary, a system known for time-consuming responses and delayed justice delivery. An aircraft engine, like an airframe, is a rapidly depreciating asset. Every day a court delays returning it, the asset loses value, and that loss falls on the owner.

What the 2025 Act and the 2026 Rules left out

The enactment of the Protection of Interests in Aircraft Objects Act, 2025, and its subsequent Rules of 2026, are undoubtedly welcome steps toward implementing the Cape Town Convention (‘CTC’) in India. They close real gaps.

One might argue, however, that the framers missed an opportunity to introduce a dedicated domestic engine registry. Consequently, even though CTC-governed engines are exempt from the moratorium under the Insolvency and Bankruptcy Code, their recovery may still be delayed by the absence of an independent domestic recordation system.

How the FAA treats engines differently (14 CFR Part 49)

Unlike legal systems and frameworks where an engine is practically swallowed by the fuselage’s legal identity, the United States Federal Aviation Administration (FAA) isolates the proprietary interest of the engine.

Under Title 14 of the Code of Federal Regulations, Part 49, conveyances affecting aircraft engines that meet the prescribed horsepower threshold may be recorded independently in the FAA Aircraft Registry. Qualifying engines are treated as separately recordable assets rather than as components of an aircraft.

The practical difference shows up in insolvency. If a US airline fails, an engine lessor need not first establish rights over the airframe. Relying on its FAA-recorded conveyance and other evidence of title, the lessor can assert ownership of the specifically identified engine and pursue repossession under the lease, bankruptcy law and other applicable requirements.

What India could do next

A dedicated domestic engine registry remains the missing piece in India’s aviation puzzle. Recent legislative updates are a major step forward, but a selective approach to the Cape Town Convention leaves lessors exposed to operational risk that has nothing to do with the merits of their title.

To capture the momentum of a booming market and meet the government’s development milestones, India may consider a registry framework that treats engines with the standalone legal sovereignty they deserve. Any such framework should be designed with the de-registration concern in mind, so that recording an interest does not become one more queue to stand in. Modernising this single regulatory bottleneck could durably improve India’s global risk rating and secure its position as a trusted aviation leader.

Conclusion: The Counter Argument

To conclude, an opposite point of view is also necessary to illustrate. Some engine lessors prefer to not have an engine registry to avoid the issues surrounding “de-registration”, some want to stay clear of the nightmare of having to go through an extra regulatory process to de-register an engine. Therefore, the floor is open for debate on which system may work better – there is no one-size-fits-all answer, as it depends on each jurisdiction’s priorities.

Frequently asked questions

Can an engine lessor use an IDERA in India?
No. An IDERA operates at the level of the registered aircraft, and the DGCA registers the airframe. An engine lessor whose engine is installed on another party’s airframe has no equivalent administrative route and must generally approach the courts.

Does the DGCA register aircraft engine serial numbers?
The DGCA registers the aircraft as a composite whole rather than maintaining an independent domestic record of individual engine serial numbers. Engine-level interests are recorded internationally on the International Registry, not domestically.

Are aircraft engines protected from the IBC moratorium?
Engines that qualify as aircraft objects under the Cape Town Convention are exempt from the moratorium under the Insolvency and Bankruptcy Code. Exemption addresses the stay, not identification, so recovery can still stall where no domestic record establishes which engine belongs to whom.

How does the United States handle engine repossession differently?
Under 14 CFR Part 49, conveyances affecting qualifying aircraft engines can be recorded independently in the FAA Aircraft Registry. An engine lessor can therefore assert title to a specific engine without first establishing rights over the airframe it is installed on.