Mumbai, Feb 13: In a ruling with wide implications for India’s aviation sector, the National Company Law Tribunal (NCLT) has held that airport operators cannot claim secured creditor status in airline insolvency proceedings. The decision places airport dues in the unsecured operational creditor category under the Insolvency and Bankruptcy Code (IBC).
The Mumbai bench delivered the order during the liquidation proceedings of Jet Airways (India) Ltd, upholding the liquidator’s classification of airport charges owed to Mumbai International Airport Ltd (MIAL) and Delhi International Airport Ltd (DIAL).
Why this matters for Indian airports: The ruling reduces airports’ leverage in recovering dues from bankrupt airlines, increasing financial risk across the aviation ecosystem.
Key Highlights
- ₹860 crore: Claimed by MIAL; ₹510.75 crore admitted
- ₹352 crore: Claimed by DIAL; ₹244 crore admitted
- Ruling date: 13 February 2026
- Who is affected: Airport operators, airlines, lenders
- Immediate impact: Reduced recovery priority for airport dues
Core facts
MIAL and DIAL had filed claims for unpaid charges related to aircraft parking, hangar usage, and other airport services provided to Jet Airways before and during its insolvency. MIAL submitted claims exceeding ₹860 crore, of which ₹510.75 crore was admitted. DIAL’s claim of about ₹352 crore plus GST saw ₹244 crore admitted.
The Airports Authority of India (AAI), which receives a 38% revenue share from MIAL, intervened in the proceedings, arguing that airport dues should be treated as priority payments due to their public infrastructure role.
The tribunal, however, ruled that detention rights under airport regulations do not amount to a “security interest” as defined under the IBC. As a result, airport operators cannot be treated as secured creditors in airline bankruptcies.
Impact and official response
Legal experts say the ruling significantly weakens airports’ bargaining power in insolvency cases. Suhael Buttan, Partner at SKV Law Offices, said the order clarifies that airports cannot rely on liens or aircraft detention rights to secure repayment priority.
The NCLT also clarified that only parking and storage charges incurred during the insolvency resolution period qualify as insolvency resolution process costs. All other dues, including interest and escalated charges, rank below secured lenders and financial creditors in the repayment hierarchy.
Industry observers note that the decision may prompt airports to tighten credit terms, demand advance payments, or revise commercial agreements with airlines to manage exposure to future defaults.
FAQs
The tribunal ruled that airport operators are unsecured operational creditors and cannot claim secured status in airline insolvency proceedings.
It lowers their repayment priority, making it harder to recover dues when airlines enter bankruptcy or liquidation.
Mumbai International Airport Ltd and Delhi International Airport Ltd were the primary claimants.
Yes, AAI intervened citing its revenue share and public interest, but the tribunal rejected secured creditor status.
Only parking and storage charges incurred during the insolvency period qualify as priority resolution costs.
Disclaimer: This report is based on publicly available court records and official filings. It does not constitute legal or financial advice. Readers are advised to consult qualified professionals for case‑specific guidance.
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