India Proposes Airline Health Score for Creditworthiness

India has proposed a standardized Airline Health Score to assess airlines' creditworthiness, submitted to the International Civil Aviation Organisation. The initiative targets improved risk management at airports, emphasizing credit-based terms. The framework would address financial challenges faced by smaller carriers in a rapidly growing aviation market.

India has proposed the development of a standardized creditworthiness evaluation system for airlines, aiming to introduce tiered, risk-based payment terms to airports. The suggestion is part of a working paper presented to the International Civil Aviation Organisation (ICAO) ahead of its 42nd General Assembly scheduled to commence on September 23.

Emphasizing the urgency of a unified Airline Health Score (AHS), India highlighted that a considerable portion of airport revenues, particularly in developing nations, is dependent on aeronautical charges often accrued on a post-service credit basis. This puts financially distressed airlines at a disadvantage, burdening airport operators with significant financial risks.

The proposed AHS framework would enable better risk management and contract negotiation, and ICAO is urged to consider a formal study involving IATA, ACI, states, and financial institutions to develop this tool, which aims to aid dispute resolution and provide transitional support for financially stressed airlines.