The Indian government’s Civil Aviation Ministry has clarified that there is no official national policy preventing major airport operators from owning or running scheduled airlines. However, specific contractual agreements governing certain airports under the public-private partnership model currently restrict airlines and their associates from holding equity in airport concessionaires.
Murlidhar Mohol, who is the Minister of State for Civil Aviation, has informed the Rajya Sabha that the Airports Authority of India has received a request for exemption from the particular contractual constraints. However, the ministry has not yet examined or approved the request. The issue became important after it was reported that Adani Airports had written to the concerned authority requesting a waiver of policy so that the group or its subsidiaries could own a scheduled airline.
Adani Enterprises had earlier said that it is not looking to enter the aviation sector. Still, a letter that a Member of Parliament had leaked confirmed that Adani Defence & Aerospace had been considering the idea of launching an airline because it would enable them to increase their footprint in India’s booming aviation ecosystem, and that it was in the best interests of the country because there were hundreds of millions of new passengers to be accommodated in the next 10 years.
On the other hand, traditional airlines have expressed serious reservations about this cross-ownership issue. Top executives in the airline industry, like the co-founder of IndiGo, have pointed out that such cross-ownership will lead to a major conflict of interest, distorted market competition, improper allocation of airport slots, and higher costs.
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Despite these major issues related to competition and slot allocation, the ministry has provided no information on whether it has sought the opinion of regulatory bodies such as the Competition Commission of India or the Directorate General of Civil Aviation.
