The Indian government is considering relaxing rules that prevent airport operators from owning airlines, a move that could pave the way for the Adani Group to enter the airline business. Adani already operates seven airports, including Mumbai, India's second busiest, and handles over 23% of the country's air traffic. If it also owns an airline, it could reshape competition in the aviation sector.
Current regulations under the Airports Economic Regulatory Authority (AERA) Act and competition law restrict cross-ownership to prevent conflicts of interest and abuse of market power. However, the government sees potential benefits: attracting more investment, improving regional connectivity, and allowing airport operators to integrate services for greater efficiency.
The Adani Group has not confirmed plans to start an airline, but its recent hiring of aviation executives and its dominant airport presence suggest ambition. Other airport operators, such as GMR (which runs Delhi and Hyderabad airports), would also be affected by any rule change.
Proponents argue that integration can lead to cost savings, better passenger experience, and new investment in airports. Opponents warn that a single entity controlling both airport infrastructure and airline operations could stifle competition, leading to higher charges for other airlines and fewer choices for passengers.
Passengers may benefit from improved connectivity but could face higher fares if competition is reduced. Competing airlines like IndiGo, SpiceJet, and Air India could face discriminatory access to slots and facilities. The government must balance its investment goals with the need for fair market access.
The final policy change is expected in the coming months. Whether Adani announces an airline and how other players react will be key. For the public, the immediate impact is uncertainty, but if the rules are eased, India could see a new airline tied to Adani's airports.