What's impact of airline insolvencies on banks?

The aviation sector is one of the most capital-intensive sectors because of high taxation, aviation turbine fuel charges, and airport charges. As a result, many major airlines in India have struggled to survive and have been forced to shut shop. The last two previous major airline insolvencies in India (Kingfisher and Jet) caused huge losses to stakeholders such as creditors, employees with their salary dues, etc. When an airline company collapses, passengers have to be protected from losses. These losses can generally be categorised into two types, financial loss accruing from payment of ticket costs and dues to creditors and operational partners. Here's a look at what banks lost.

[caption id="attachment_10548041" width="537"] Grounded flights hit hard[/caption]