Akasa Air CEO Vinay Dube has voiced strong support for a government proposal that would allow airport operators to own and run airlines in India. Dube emphasized that such a move would significantly increase competition and offer consumers more choices within the rapidly expanding Indian aviation market.
Government Weighs Policy Shift for Aviation Sector
The Ministry of Civil Aviation has initiated discussions regarding a policy change to ease current ownership rules. Presently, operators of major airports, such as Delhi and Mumbai, are restricted to holding no more than a 10 percent stake in any airline. Any relaxation of these rules would require legal clearance from the law ministry and final approval from the Union Cabinet.
If approved, the new policy could pave the way for large infrastructure groups like Adani Group and GMR Airports Ltd. to launch their own air carriers. Adani Group currently manages Mumbai airport and seven other facilities, while GMR oversees Delhi airport and four additional Indian airports.
Akasa Air Backs Increased Competition
Speaking in an interview, Dube expressed confidence that the government would carefully consider all potential implications, including concerns about conflict of interest, before finalizing any legislation. "I am happy and supportive of this move," Dube stated, underscoring the overarching goal of providing consumers with a wider array of options.
India's domestic aviation sector is one of the fastest-growing globally, yet it has seen a reduction in the number of active airlines over the past decade. The market is currently dominated by IndiGo and Air India, which together account for nearly 90 percent of domestic capacity, following events like the collapse of Jet Airways and Go First, and the consolidation of Vistara and AirAsia India under the Tata Group.
Concerns Over Conflict of Interest
While proponents argue for increased competition, the proposal has drawn criticism regarding potential conflicts of interest. IndiGo co-founder and managing director Rahul Bhatia previously warned of a "massive conflict of interest" if airport operators were permitted to favor their own airlines in crucial areas like slot allocation.
Despite these concerns, Civil Aviation Minister K Rammohan Naidu reiterated the government's commitment to supporting both the expansion of existing airlines and the entry of new operators, as stated in a recent reply to the Rajya Sabha.
Akasa Air, which is set to complete four years of operations soon, operates a fleet of 40 Boeing 737 aircraft, positioning itself as a growing player in the dynamic Indian aviation landscape.