The National Company Law Appellate Tribunal (NCLAT) has directed the National Company Law Tribunal (NCLT) to determine who will bear the dues owed by Jet Airways to Mumbai International Airport Limited (MIAL) for aircrafts parked at the airport since the airline’s grounding in 2019. The long-standing issue has raised questions about accountability and responsibility for the payments related to the parked planes, which have accumulated substantial fees over the years.
Jet Airways, once a leading carrier in India, ceased operations in April 2019 due to a financial crisis that led to its grounding. Since then, several of its aircraft have been parked at various airports, with Mumbai’s Chhatrapati Shivaji Maharaj International Airport being a key location for these grounded planes. The airline, under its insolvency proceedings, has faced legal challenges regarding the payment of various outstanding dues, including those for parking, maintenance, and other airport services.
Mumbai International Airport Limited (MIAL), which operates one of the busiest airports in India, has been seeking payment for the storage of these aircraft, citing the substantial costs associated with maintaining the planes on the tarmac. With Jet Airways in bankruptcy proceedings and its assets being managed under the Insolvency and Bankruptcy Code (IBC), the issue of who will foot the bill for the parking charges has become a complex legal matter.
MIAL had previously raised concerns over the mounting dues, which continued to accumulate as the aircraft remained parked without being used. While Jet Airways’ creditors and stakeholders work through the insolvency process, the airport authority has sought clarification on who should take responsibility for these costs, which are not a part of Jet Airways’ regular operations but have arisen as a result of the airline’s financial troubles and grounding.
In response to the matter, NCLAT’s directive to NCLT is an important step in resolving the dispute. The tribunal has been tasked with determining whether the aircraft parking dues should be considered a part of Jet Airways’ ongoing liabilities or if they fall under the purview of a different entity, possibly the airline’s creditors or a third party involved in managing its assets during the insolvency process. The decision will have significant implications for the airline’s ongoing restructuring efforts and could set a precedent for how similar cases are handled in the future.
Jet Airways has been in a state of limbo since its grounding, with various attempts at reviving the airline being made under new ownership. The airline’s assets, including its aircraft, have been the subject of extensive negotiations, with potential investors and stakeholders seeking to restructure the airline’s debts and re-establish operations. However, the issue of the parked aircraft at MIAL and the mounting dues remains a contentious point in the overall revival process.
The NCLT’s decision, as directed by NCLAT, will clarify whether the airport authority can recover the costs directly from Jet Airways or if it must seek payment from other entities, such as the airline’s creditors or the new owners of the airline. This ruling will be closely watched by the aviation industry, as it will have implications not only for Jet Airways’ ongoing revival efforts but also for the broader legal framework governing insolvency proceedings in the aviation sector.
As the aviation industry grapples with financial challenges, particularly in the wake of the COVID-19 pandemic, the issue of unpaid dues and grounded aircraft is likely to become more prevalent. The NCLT’s ruling on this case could set important precedents for how such disputes are handled in the future, potentially influencing the way airports, airlines, and creditors manage outstanding debts in the complex environment of insolvency and bankruptcy proceedings.
