Modi government says airport operators can invest in airlines
What's the story
The Indian government has clarified that there is no policy preventing major airport operators from holding significant equity in or running scheduled airlines. The clarification comes as the Airports Authority of India (AAI) has received a waiver request that could allow an airport operator to enter the airline business. Notably, existing contracts may restrict such cross-ownership arrangements.
Ongoing examination
Some PPP contracts impose restrictions
Minister of State for Civil Aviation Murlidhar Mohol clarified in the Rajya Sabha that while there is no government policy against airport operators holding equity in airlines, some contracts under the Public Private Partnership (PPP) model do impose restrictions.
These restrictions prevent scheduled airlines and their group entities/associates from holding equity shares of concessionaires.
The waiver request received by AAI has not yet been examined by the Ministry of Civil Aviation.
Business expansion
Speculation around Adani Group's interest
The clarification comes amid speculation about the Adani Group's interest in entering the airline business.
A purported letter from Adani Airports to AAI, shared by TMC MP Mahua Moitra on X, sought a waiver for Adani Defence & Aerospace and its affiliates to invest in or control a scheduled airline in India.
However, Adani Enterprises denied these reports, calling them "entirely baseless and factually incorrect."
Industry apprehensions
Concerns among incumbent airlines
The possibility of airport operators owning airlines has raised concerns among incumbent airlines.
IndiGo MD Rahul Bhatia warned that this could create a "massive conflict of interest" and hurt consumers.
However, government officials have suggested that any policy change could include safeguards to ensure operational separation between airport and airline businesses, including restrictions on sharing commercially sensitive information and common management.