India’s civil aviation ministry has clarified that there is no government policy preventing major airport operators from owning or running airlines, amidst recent reports suggesting potential rule changes to boost competition and market dynamics.
India’s civil aviation ministry has said there is no government policy blocking major airport operators from owning a sizeable stake in scheduled airlines or running them directly, in a clarification that cuts against recent reports of a possible rule change. Murlidhar Mohol told the Rajya Sabha that the government does not restrict airport operators from holding substantial equity in airlines, although he pointed out that some public-private partnership contracts do impose limits on airline groups and their associates investing in airport operators.
Mohol said the restrictions apply in the other direction in some cases: agreements linked to certain airport projects bar scheduled airlines, and companies connected to them, from taking equity in the airport concessionaire. He also said the Airports Authority of India has received a request for a waiver of one of these provisions, but the ministry has not yet examined the matter.
The clarification comes after reports in several Indian business publications suggested the government was weighing changes that could allow airport operators such as Adani Group and GMR Airports to move into the airline business. Those reports said the idea was being discussed as a way to increase competition in a market dominated by IndiGo and Air India, which together account for most domestic capacity.
Adani has denied it is planning such a move. The company said it was not evaluating any proposal to enter the airline business and described the reports as “false” and “baseless”. That denial now sits alongside the ministry’s position that there is no blanket policy ban, only contractual restrictions in some existing airport agreements.
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