India may let Adani, GMR have own airlines
India has initiated talks on a policy change that would allow airport operators to own and run airlines, according to people familiar with the matter
India has initiated talks on a policy change that would allow airport operators to own and run airlines, according to people familiar with the matter, potentially clearing a path for the Adani Group and GMR Airports Ltd. to have their own carriers.Current rules bar the operators of airports in Delhi and Mumbai from owning more than 10% stake in any airline, said the people, who asked not to be identified because the discussions are private.The deliberations are underway within India’s Ministry of Civil Aviation, and any waiver is expected to require legal clearance from the law ministry as well as approval of the federal Cabinet led by Prime Minister Narendra Modi, the people said.A relaxation of ownership restrictions would allow the Adani Group — whose unit operates the Mumbai airport and seven others — and GMR Airports, which manages the New Delhi airport and four additional facilities in India, to own carriers.
The aim of the policy is to broaden competition in the market at a time when IndiGo and Air India control nearly 90% of domestic capacity.Also read | Trump announces 100% tariff for generic drugs starting Aug 2028While that could ease the near-duopoly the top two carriers hold over India’s skies, it also raises the prospect of fresh imbalances, including airport operators possibly allocating prime slots to their own carriers.The civil aviation ministry didn’t immediately respond to an emailed request for comment.While new entrants could theoretically ease that concentration, the global shortage of aircraft remains a major constraint. Delivery delays at Airbus SE and Boeing Co. have slowed expansion plans worldwide, with pandemic-era supply chain disruptions continuing to limit availability.Internationally, airport-airline joint ownership has achieved limited commercial success. In the US, strict public ownership of major airfields and Federal Aviation Administration revenue-diversion laws effectively prevent local governments from channeling airport income into airline ventures.
In the European Union, joint ownership is technically allowed, but aggressive antitrust enforcement makes it functionally unviable.Also read | After Hormuz, Gate of Tears may make world cryThe Adani Group already has an outsized presence across India’s infrastructure and industrial landscape — from being the country’s largest private ports operator to becoming its second-largest cement producer. In energy, the group’s presence spans thermal generation, city-gas distribution and solar development. Its position as the one of the nation’s largest airport operators recently fueled concerns about its growing influence.Little CompetitionThe number of Indian airlines has narrowed sharply over the past decade.The collapse of Jet Airways India Ltd., Go Airlines India Ltd., along with the merger of Vistara and AirAsia India under the Tata Group, has left IndiGo and Air India in a dominant position in the world’s fourth-largest aviation market — with newer players like Akasa Air, struggling incumbents like SpiceJet Ltd.
The BriefWire