“The decision reduces the bargaining power of airport operators as it confirms that detention rights under the Airport Authority of India regulations do not create a security interest,” said Suhael Buttan, partner at law firm SKV. “By classifying airport charges as unsecured operating debts, the tribunal places them at the lowest level of recovery.”
Stressed airlines may now be less willing to pay down payments or accept tighter credit terms because they know airports can’t get priority in insolvency by asserting a lien, Buttan says. As a result, he said, airports have less bargaining power and may find it harder to insist on upfront payments to keep operating.
The decision came in the process liquidation proceedings of Jet Airways, where the Bombay National Company Law Tribunal on 13 February largely upheld the liquidator’s decision to limit the claims of Adani-owned Mumbai International Airport Ltd (MIAL) and GMR-operated Delhi International Airport Ltd (DIAL).
MIAL claimed more ₹860 crore for parking, hangar and related charges after a Jet plane remained grounded at the Mumbai airport for years. Probably from that ₹510.75 crore was accepted while the rest was rejected. DIAL claimed around ₹352 crore plus GST, but only approx ₹244 million crowns were received.
The Airports Authority of India (AAI) joined as an intervenor and supported MIAL. It said it receives about 38% of the airport’s revenue, which ultimately goes to the treasury, giving it a financial interest. AAI urged the tribunal to treat the airport charges as priority costs in the insolvency resolution process (CIRP) and to ensure that the planes are not sold without clearing the outstanding payments.
However, the tribunal ruled that both airports were unsecured operating creditors. While parking and storage charges during the insolvency period will be treated as priority costs of the insolvency resolution process, most other charges, including interest and certain enhanced charges, will be placed below secured creditors in the repayment hierarchy.
The airports challenged the liquidator’s decision to treat their unpaid fees as operating debt rather than secured claims. They argued that under airport regulations, the right to detain an aircraft for unpaid charges constitutes a statutory lien or lien. The tribunal rejected this argument, holding that retention rights do not create a security interest under the IBC.
The bench clarified that airport regulations only confer the power to detain aircraft for non-payment and do not create legal fees. Once liquidation begins, all claims must be processed strictly according to The waterfall mechanism of the Insolvency and Bankruptcy Code (IBC).
Ports, railway terminals take note
According to § 53, costs associated with insolvency and liquidation are paid first, followed by secured creditors and workers’ contributions, then employee contributions and unsecured financial creditors. Government fees and other operating creditors are ranked lower, and equity shareholders are paid last if funds remain. By placing the airports among operational creditors, the decision moves most of their claims down the priority ladder.
Lawyers say the decision increases the credit risk of airport operators. “Airport charges can be significant and if recovery from insolvency is uncertain, operators are effectively extending unsecured credit to busy airlines. This risk is now more visible,” Buttan said.
According to Hardeep Sachdev, senior partner at AZB & Partners, “this will force airports to tighten their business posture and move away from reliance on post-facto collections and move to advance or consistent regular payments, bank guarantees or cash-and-carry models.”
Insolvency experts say the impact could extend beyond aviation. Ports, rail terminals and logistics centers could also be treated as unsecured creditors in insolvency cases unless the law clearly grants them a recognized right to security. Mere power to detain cargo or vessels does not automatically secure them under insolvency law.
“The consideration may go beyond aviation. Ports, rail terminals and logistics hubs that provide services without statutory fees or perfect security could be addressed in the same way. The message is simple: if you are not insured, insolvency law will not favor you,” said Raheel Patel, partner at Gandhi Law Associates.
Coin inquiries emailed to MIAL, DIAL and Jet Airways’ liquidator, Satish Kumar Gupta, had not called for a response till the time of publication.
The airport charges dispute is closely related to the sale of three grounded Boeing 777-300ER aircraft to Jet Airways, which have been parked at the Mumbai airport since 2018. ₹400 crore, but the sale was delayed due to a lawsuit over unpaid dues. In October 2025, the National Company Law Appellate Tribunal (NCLAT) ordered the liquidator to keep the proceeds of the sale in an escrow account until it decides the fee dispute. NCLT. The tribunal has now clarified that MIAL is not a secured creditor.
Jet Airways ceased operations in April 2019 due to mounting debt and was admitted into insolvency in June 2019. The Jalan Kalrock consortium’s revitalization plan, approved in 2021, has failed due to delays and funding gaps. In November 2024, the airline was forced into liquidation on Supreme Court directions, with its assets to be sold and the proceeds distributed according to the IBC hierarchy.
The insolvency regime has so far tried to revive the collapsed airline in India. After Jet Airways failed to resume operations despite an approved plan, Go First also went into insolvency in 2023 and later failed to secure a viable revival and was eventually ordered into liquidation.