Adani’s Mumbai Airport Clashes with IndiGo, Air India Over Payment Terms

Key Takeaways

• Mumbai Airport’s new policy requires ₹2 billion cash deposits instead of bank guarantees starting October 2024.
• IndiGo and Air India, holding 91% of India’s market, oppose this policy due to financial strain.
• MIAL aims to reduce risks from airline defaults after $71.11 million losses and increasing debt.

Adani’s Mumbai International Airport Ltd (MIAL) has found itself at the center of a major dispute with India’s two largest airlines, IndiGo and Air India, after introducing a new payment policy that could reshape the financial landscape of the country’s aviation sector. The policy, which took effect in October 2024, requires airlines to provide cash deposits as security for airport charges, replacing the long-standing practice of using bank guarantees. This move has triggered strong objections from both airlines and sparked concern across the industry about its potential ripple effects.

What’s Happening at Mumbai International Airport?

Who: Adani-run Mumbai International Airport Ltd (MIAL), IndiGo, Air India
What: New policy requiring cash deposits instead of bank guarantees for airport charges
When: Policy implemented in October 2024; dispute ongoing as of May 30, 2025
Where: Mumbai International Airport, India’s second-busiest airport
Why: MIAL cites financial strain, debt obligations, and risk from airline defaults
How: Airlines must collectively deposit around ₹2 billion (about $23 million) as security

The heart of the matter is a shift in how airlines pay for essential airport services like landing and parking. Instead of providing a bank guarantee—a promise from a bank to pay if the airline fails—airlines must now hand over actual cash as a deposit. This change is not just a technical adjustment; it has real consequences for the financial health of airlines and the airport itself.

Why Did Adani’s Mumbai Airport Change Its Payment Policy?

The decision by Adani and MIAL did not come out of nowhere. The airport has been under financial pressure since the Adani Group took over management in 2021. In the last fiscal year, MIAL reported a $71.11 million loss on revenues of $461 million. The airport also faces significant debt and must pay authorities before it receives payments from airlines, leading to cash flow problems.

Arun Bansal, CEO of Adani Airport Holdings, explained the reasoning behind the policy:

“None of these airlines normally pay on time … we want to align our cash flow with the airlines’ cash flow. They have taken advantage of our niceness.”

The airport’s management points to recent bankruptcies of Indian airlines—such as Jet Airways, Go First, and Kingfisher Airlines—which left airports with unpaid bills. By demanding cash deposits, MIAL hopes to protect itself from similar risks in the future and improve its credit rating.

How Does the New Policy Work?

Here’s a step-by-step look at how the new payment system operates:

1. Notification: MIAL informs airlines about the new requirement for cash deposits as security for airport charges.
2. Deposit Calculation: Airlines must calculate and deposit a set amount—₹2 billion for IndiGo and Air India combined—into a designated bank account.
3. Ongoing Payments: Airlines continue to pay regular airport fees (landing, parking, etc.) as they use the airport.
4. Use of Deposit: If an airline delays payment, MIAL can use the cash deposit to cover what’s owed.
5. Slot Cancellation: If an airline fails to comply, MIAL reserves the right to cancel its slots (the scheduled times when airlines can use the airport), though it says it does not plan to do this to avoid disrupting passengers.

This policy is a big change from the previous system, where a bank guarantee acted as a safety net but did not require airlines to tie up large amounts of cash.

Why Are IndiGo and Air India Objecting?

IndiGo and Air India are not just any airlines—they are the giants of Indian aviation, together making up 91% of the market. Both have strongly protested the new policy, arguing that it will put a heavy strain on their finances.

Air India, in a letter to the government, warned:

“It is highly likely that other airports across the country could adopt similar measures, leading to widespread financial strain.”

The airlines’ main concerns include:

• Working Capital Strain: The cash deposit requirement ties up money that airlines could otherwise use for daily operations, maintenance, or expansion. This is especially tough for loss-making carriers like Air India, which reported a $521 million annual loss.
• Industry Precedent: If other airports follow MIAL’s lead, airlines could face similar demands across the country, multiplying the financial burden.
• Potential for Higher Costs: Airlines may need to raise fares or cut services to cope with the extra costs, which could affect passengers.

The Federation of Indian Airlines also disagreed with MIAL’s claim that airlines are late payers, suggesting that the airport’s financial problems are not solely due to airline payment delays.

What Does the International Air Transport Association (IATA) Say?

The International Air Transport Association (IATA), which represents both IndiGo and Air India, has taken the airlines’ side. In a letter to the Ministry of Civil Aviation, IATA argued that the new policy is essentially using airline deposits to fund the airport’s working capital needs.

IATA’s position is clear: airports should not shift their financial risks onto airlines, especially when the airlines themselves are already under financial pressure.

What’s the Government’s Role?

The Ministry of Civil Aviation (MoCA), which holds a 26% stake in MIAL, has not issued a public response as of May 30, 2025. The lack of an official stance has left airlines and the airport in a standoff, with no clear path to resolution.

For readers seeking more information about the Ministry’s responsibilities and contact details, the official Ministry of Civil Aviation website provides authoritative resources.

How Does This Affect Passengers and the Aviation Sector?

For now, passengers using Mumbai International Airport are unlikely to see immediate changes. Flights are operating as usual, and there have been no reports of service disruptions. However, the indirect effects could become apparent over time:

• Possible Fare Increases: If airlines face higher costs, they may pass these on to passengers through higher ticket prices.
• Reduced Services: Airlines might cut back on routes or frequencies to save money.
• Industry Precedent: If other airports adopt similar policies, the entire aviation sector could see changes in how airlines and airports do business.

The Bigger Picture: Financial Stress in Indian Aviation

The dispute between Adani’s Mumbai International Airport Ltd and the airlines is not happening in isolation. It reflects broader financial stress in India’s aviation sector:

• Recent Airline Failures: The collapse of Jet Airways, Go First, and Kingfisher Airlines has left airports and creditors with unpaid bills, making everyone more cautious.
• Geopolitical Disruptions: Events like the closure of Pakistan’s airspace have increased costs for airlines. For example, Air India faces an extra $50 million per month due to rerouted flights.
• Rapid Growth: India’s aviation market is expanding quickly, with Mumbai International Airport handling 53 million passengers in 2024. This growth brings both opportunities and challenges.

Aviation analysts note that both airports and airlines are under pressure. Airports want to protect themselves from financial shocks, while airlines need flexibility to manage their own cash flows. The new policy at Mumbai International Airport is a sign of these competing needs.

Multiple Perspectives: What Are Stakeholders Saying?

Here’s a look at the positions and concerns of key players:

• Adani/MIAL:
  • Sees cash deposits as necessary for financial stability, risk reduction, and improving credit ratings.
• IndiGo & Air India:
  • Oppose the policy due to the strain on working capital and fear that other airports will follow suit, making it harder for airlines to operate.
• IATA:
  • Argues the policy is a misuse of airline funds, shifting the airport’s financial risks onto airlines.
• Federation of Indian Airlines:
  • Disputes the claim that airlines are late payers, suggesting the airport’s financial problems have other causes.
• Government (MoCA):
  • Has not taken a public stance, leaving the issue unresolved.

Quantitative Snapshot: The Numbers Behind the Dispute

These figures highlight the scale of the financial challenges facing both the airport and the airlines.

What Could Happen Next?

As of late May 2025, the dispute remains unresolved. Airlines continue to lobby the government to intervene, while MIAL stands by its policy. The Ministry of Civil Aviation’s silence adds to the uncertainty.

Possible outcomes include:

• Government Intervention: If the Ministry steps in, there could be a compromise or even a rollback of the policy.
• Industry-Wide Adoption: If other airports adopt similar policies, airlines could face even greater financial strain.
• Status Quo: The standoff could continue, with both sides waiting for the other to give in.

Industry experts warn that if the policy spreads, airlines’ liquidity—their ability to quickly access cash—could be severely affected. This might lead to less competition and higher fares for passengers.

Practical Guidance for Stakeholders

For Airlines:

• Review Cash Flow: Airlines should closely monitor their cash reserves and plan for the possibility of similar demands from other airports.
• Engage with Authorities: Ongoing dialogue with the Ministry of Civil Aviation and industry groups like IATA is essential.
• Communicate with Passengers: If service changes become necessary, clear communication will help maintain customer trust.

For Airports:

• Balance Risk and Relationships: While financial stability is important, airports must also consider the impact on airline partners and the broader industry.
• Transparency: Clear explanations of policy changes can help reduce misunderstandings and build trust.

For Passengers:

• Stay Informed: While there is no immediate impact, passengers should watch for announcements from airlines about fares or service changes.
• Plan Ahead: Booking tickets in advance and staying flexible can help manage any potential disruptions.

Official Resources and Contacts

For more information or to raise concerns, stakeholders can reach out to:

• Mumbai International Airport Ltd (MIAL):
  Official website | Customer Care: +91-22-66851010
• Ministry of Civil Aviation, Government of India:
  Official website | Email: [email protected]
• International Air Transport Association (IATA) India:
  Official website

Conclusion: A Turning Point for Indian Aviation?

The clash between Adani’s Mumbai International Airport Ltd and the country’s largest airlines, IndiGo and Air India, is more than just a disagreement over payment terms. It highlights the financial pressures facing both airports and airlines in India’s fast-growing aviation market. The outcome of this dispute could set the tone for how airports and airlines work together in the future.

As reported by VisaVerge.com, the industry is watching closely to see whether the government will step in or if the new policy will become the norm across India. For now, the standoff continues, with both sides holding firm and the future of airport-airline relations hanging in the balance.

Actionable Takeaway:
All stakeholders—airlines, airports, government, and passengers—should stay alert to further developments. Open communication and careful financial planning will be key as the industry adapts to these changes. For official updates and policy details, visit the Ministry of Civil Aviation’s website.

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Learn Today

Cash Deposits → Actual money paid upfront as security to cover airport charges instead of bank guarantees.
Bank Guarantees → Financial promises by banks ensuring payments if airlines default on airport charges.
Working Capital → Funds that airlines use daily for operations, maintenance, and expansion.
Slots → Scheduled times airlines are permitted to land and operate flights at an airport.
Liquidity → The availability of cash or assets that can be quickly converted to cash for immediate use.

This Article in a Nutshell

In October 2024, Mumbai Airport replaced bank guarantees with ₹2 billion cash deposits from IndiGo and Air India, sparking fierce opposition over airline liquidity. This policy change aims to stabilize airport finances amid large losses but could reshape India’s aviation industry and impact ticket prices and services.
— By VisaVerge.com