Centre Says No Policy Bars Airport Operators From Owning Airlines Amid Cross-Ownership Debate

The government on Monday said there is no policy preventing major airport operators from owning significant stakes in scheduled airlines or entering the airline business.

The clarification came after the Airports Authority of India (AAI) received a request seeking relaxation of contractual provisions that restrict certain airport operators from participating in aviation operations.

Minister of State for Civil Aviation Murlidhar Mohol provided the response in the Rajya Sabha while replying to a question raised by CPI(M) MP John Brittas regarding cross-ownership between airport operators and airlines.

AAI receives request for waiver of airport restrictions

The Civil Aviation Ministry said that while no government policy prohibits airport operators from owning or operating airlines, some airport concession agreements under the public-private partnership (PPP) model include restrictions.

These contractual provisions prevent scheduled airlines and their group companies or associates from holding equity in airport concessionaires. The ministry confirmed that AAI has received a request seeking a waiver from such restrictions but added that the proposal is yet to be examined.

“The request seeking waiver of the relevant agreement provision has been received by AAI. The matter has not yet been examined by the Ministry of Civil Aviation,” the government said.

Airline industry raises conflict of interest concerns

The clarification comes amid reports suggesting that the Adani Group was exploring a possible entry into India’s airline sector. A letter dated June 4 from Adani Airports to AAI, shared by TMC MP Mahua Moitra on X, showed the airport operator seeking approval to allow Adani Defence & Aerospace and its affiliates to invest in, establish, acquire, own, promote or control a scheduled airline.

Earlier reports had suggested that the conglomerate was considering entering the airline business. However, Adani Enterprises later dismissed the reports, stating that claims about evaluating an airline venture were “entirely baseless and factually incorrect”.

The possibility of airport operators entering the airline sector has also drawn concerns from existing carriers. IndiGo Managing Director Rahul Bhatia had said that allowing airport companies to own airlines could lead to a “massive conflict of interest” and potentially affect consumers.

The government’s clarification is expected to keep the focus on the regulatory framework governing airport and airline ownership in India.