New Delhi: India's government has clarified that no policy prevents airport operators from owning scheduled airlines. However, existing public-private partnership agreements for some airports may contain restrictions. This statement comes amid speculation about Adani Group's potential entry into the airline sector, a move IndiGo's co-founder flagged as a conflict of interest.
No Policy Restriction on Airport Operator Airline Ownership
The Indian government has stated there is no overarching policy that prohibits airport operators from owning and operating scheduled airlines. Minister of State for Civil Aviation Murlidhar Mohol informed the Rajya Sabha that while no central policy stands in the way, certain agreements governing airports developed under public-private partnerships (PPPs) do impose specific limitations.
Adani Group's Interest and Industry Concerns
This clarification surfaces as reports suggest the Adani Group, which manages eight airports, is exploring a move into the airline business. The conglomerate has previously denied such plans. The potential for airport operators to own airlines has raised concerns, with IndiGo Co-Founder and Managing Director Rahul Bhatia highlighting a "massive conflict of interest." Conversely, Vinay Dube, CEO of Akasa Air, expressed support for the proposal, noting that increased competition is vital for India's rapidly growing aviation market, provided the government considers all implications.
Airports Authority of India Consideration
The Airports Authority of India (AAI) has received a request to waive restrictions related to airline ownership in PPP airport agreements. The Ministry of Civil Aviation has yet to review this request. Major airports, including those in Delhi and Mumbai, operate under PPPs where the AAI holds a stake, and their management and development agreements (OMDAs) contain clauses addressing potential ownership by airlines.