Cross-border implications of the legal regime on insolvency in the aviation sector

Dipti Lavya Swain; Sandhya Kumari; Badrinath Srinivasan

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Cross-border implications of the legal regime on insolvency in the aviation sector

Dipti Lavya Swain, Sandhya Kumari , Badrinath Srinivasan

https://doi.org/10.22495/bprv3i1p1

Abstract

This research investigates the significant impact of India’s insolvency and bankruptcy laws on the aviation industry, focusing on major airline insolvencies such as Kingfisher and Jet Airways. By employing doctrinal research, the study examines the effects of the Insolvency and Bankruptcy Code (IBC) in both the pre- and post-IBC periods, highlighting critical legislative and judicial developments. Although the IBC introduced essential reforms, it falls short in addressing the unique complexities of aviation insolvencies, underscoring the need for a specialized framework akin to the Cape Town Convention (CTC). The paper concludes that amending the IBC to align with international conventions like the CTC is crucial for strengthening the legal framework governing aviation insolvency in India. In light of the rapid growth of the Indian aviation sector and the financial challenges exemplified by recent airline bankruptcies, this research contributes to the discourse on improving insolvency laws. The findings suggest that addressing existing gaps and incorporating international standards are necessary to enhance the effectiveness of insolvency regulations and support a robust Indian aviation industry. This paper provides a thorough analysis of current legal inadequacies and suggests reforms to better accommodate the complexities of aviation insolvencies.

Keywords: Insolvency, Bankruptcy, Cape Town Convention, Insolvency and Bankruptcy Code, 2016, India

Authors’ individual contribution: Conceptualization — D.L.S., S.K., and B.S.; Methodology — D.L.S., S.K., and B.S.; Resources — D.L.S. and B.S.; Writing — Original Draft — D.L.S. and S.K.; Writing — Review & Editing — S.K. and B.S.; Supervision — S.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G33, K10, K11, K12, K30

Received: 01.04.2024
Revised: 01.08.2024; 10.10.2024; 08.01.2025
Accepted: 20.01.2025
Published online: 23.01.2025

How to cite this paper: Swain, D. L., Kumari, S., & Srinivasan, B. (2025). Cross-border implications of the legal regime on insolvency in the aviation sector. Business Performance Review, 3(1), 8–16. https://doi.org/10.22495/bprv3i1p1

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