The Indian Civil Aviation Ministry has clarified that there is no general government policy prohibiting airport operators from holding substantial equity in or operating scheduled airlines. However, the ministry confirmed that the Airports Authority of India (AAI) has received a specific request seeking a waiver from existing contractual restrictions at certain Public-Private Partnership (PPP) airports.
Waiver Request Under Review
Minister of State for Civil Aviation, Murlidhar Mohol, stated in a written reply to a query in Rajya Sabha that while no overarching policy restricts such ownership, current agreements for some PPP airports contain clauses that prevent scheduled airlines and their group entities or associates from holding equity shares in the concessionaires.
Mohol confirmed that a request to waive these specific contractual provisions has been submitted to the AAI. He emphasized that the Ministry of Civil Aviation has not yet examined the matter, implying that no decision has been made regarding the potential relaxation of these rules.
Industry Speculation and Concerns
This development comes amidst ongoing speculation, though denied by the Adani Group, that the conglomerate was seeking to enter the airline business. The Adani Group currently operates eight airports in India, including major hubs like Mumbai and Jaipur.
The prospect of airport operators owning airlines has drawn criticism from industry players. Rahul Bhatia, co-founder and managing director of IndiGo, India's largest airline, previously voiced concerns about a potential “massive conflict of interest.” Bhatia argued that such cross-ownership could ultimately be detrimental to consumers and lacks global precedent.
CPI(M) MP Dr. John Brittas had also questioned whether the government had assessed the impact of cross-ownership on competition, slot allocation, airport charges, ground handling, and fair access to airport infrastructure, and if bodies like the Competition Commission of India or DGCA had been consulted. The ministry’s reply indicated that no such assessment or consultations had taken place, as the matter remained unexamined.