India Weighs Allowing Airport Operators to Own Airlines

Civil Aviation Minister K. Rammohan Naidu announced that the Indian government is evaluating the pros and cons of allowing airport operators to hold stakes in airlines. The deliberation follows a June request from Adani Airport Holdings Ltd to the Airports Authority of India seeking a relaxation of norms to explore airline operations.

While no general law prohibits such cross-holding, current Operation, Management and Development Agreements for major hubs in Delhi and Mumbai limit operators to a 10% stake. Minister Naidu stated that India needs at least five airlines with 100 aircraft each to meet travel demand and support the national goal of operating over 350 airports by 2047.

The proposal has drawn criticism from industry leaders. IndiGo co-founder Rahul Bhatia argued that such ownership is "without global precedent," while other experts warned that airport-airline ownership could create conflicts of interest regarding competition and parking charges. In response to the debate, Jugeshinder Singh, CFO of Adani Enterprises Ltd, indicated the group might consider non-controlling stakes in regional carriers.