Adani Group Pushes for Policy Change to Enter Airline Sector, Eyes Competition with IndiGo and Air India
The Adani Group has reportedly approached the Central government seeking changes to existing aviation rules that restrict operators of Delhi and Mumbai airports from owning more than a 10% stake in a scheduled airline. If the proposal is accepted, it could clear the path for the conglomerate to launch its own airline and compete in India's rapidly growing aviation market.
According to reports, the request focuses on relaxing a condition introduced during the privatisation of Delhi and Mumbai airports in 2006. The rule currently prevents airport operators from having a controlling interest in an airline due to concerns over potential conflicts of interest.
The proposal comes amid discussions within the government on encouraging greater competition in the domestic aviation sector, where IndiGo and Air India together account for the majority of passenger traffic. Officials believe the entry of another financially strong airline could improve competition and expand travel options for consumers.
The Ministry of Civil Aviation is reportedly examining the legal feasibility of modifying the existing provision and has sought legal opinion on whether the clause can be amended. Any change would require approval from the Union Cabinet.
Adani Expanding Aviation Footprint
Over the past few years, the Adani Group has significantly expanded its presence across the aviation ecosystem. The company operates multiple airports across India and has also invested in businesses related to aircraft maintenance, ground handling services and pilot training.
Reports also suggest that the group's interest in launching an airline is linked to its proposed aircraft manufacturing partnership with Brazilian aerospace company Embraer. Industry sources indicate that having its own airline could strengthen the commercial prospects of the proposed manufacturing venture by creating demand for new aircraft.
While company officials have acknowledged the strategic advantages of operating an airline alongside airport infrastructure, they have reportedly stated that no final decision has been made and there are no ongoing negotiations to acquire an existing carrier.
Competition and Regulatory Concerns
Government officials are said to view the proposal as an opportunity to increase competition in India's aviation market. However, the idea has raised concerns among existing airlines, which argue that airport operators owning airlines could create conflicts in areas such as airport slot allocation and operational decision-making.
To address these concerns, policymakers are reportedly considering safeguards that would ensure operational independence between airport management and airline operations. Possible measures include restrictions on sharing commercially sensitive information and maintaining separate management structures for both businesses.
If approved, the policy change could mark a significant shift in India's aviation sector, potentially paving the way for a new major airline while reshaping competition in one of the world's fastest-growing air travel markets.
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