Centre may ease airport ownership rule, opening the door for Adani Group’s entry into the airline business. The proposed change could reshape competition in India’s aviation sector.
Highlights
- Government is considering diluting the rule that bars major airport operators from owning more than a 10% stake in an airline.
- The move could enable Adani Group, which operates multiple airports, to launch or acquire a significant stake in an airline.
- The Civil Aviation Ministry has sought legal opinion on amending the 2006 policy, including whether the change can be applied retrospectively.
- Any amendment to the existing airport privatisation agreements will require Union Cabinet approval.
- The proposal is aimed at boosting competition and breaking the long-standing dominance of IndiGo and Air India, which together control around 90% of the domestic aviation market.
- Industry experts believe an Adani-backed airline could strengthen investment in aviation infrastructure and improve passenger services.
The Central Government is exploring a major policy change that could pave the way for the Adani Group to enter India’s airline industry. According to reports, the government is considering relaxing the current rule that prevents operators of major airports from holding more than a 10% stake in an airline.
At present, this ownership restriction applies to airport operators to avoid conflicts of interest. However, officials believe the rule may now be limiting investment and competition in India’s rapidly growing aviation market.
The Civil Aviation Ministry has reportedly sought legal advice from the Solicitor General on whether the clause can be amended, including if such a change can be applied retrospectively to airport privatisation agreements signed in 2006. Since the clause forms part of these agreements, any amendment would need approval from the Union Cabinet.
The Adani Group currently operates eight airports across India, including Mumbai Airport, and holds a 74% stake in Mumbai International Airport. The group has been expanding its presence in aviation through airport operations, maintenance, training and ground handling services.
If the ownership cap is relaxed, Adani could either launch a new airline or acquire a substantial stake in an existing carrier. Government officials believe the move could increase competition in a market currently dominated by IndiGo and Air India, which together account for nearly 90% of domestic passenger traffic.
For passengers, greater competition could eventually lead to more flight options, improved connectivity, better service quality and competitive fares. While the proposal is still under consideration, it signals the government’s intent to attract more investment and strengthen India’s aviation ecosystem.
