‘Oligopolistic nature’: Govt wants to cap number of airports an operator can run

Highlighting the ‘oligopolistic nature’ of the civil aviation sector – Adani and GMR operate more than half of India’s airports – the Ministry of Civil Aviation has proposed capping the number of airports that individual operators could run.

According to a report in Business Standard the ministry wants the cap to be implemented in the upcoming auction of 11 airports that will go under the hammer as bundles of two or three. The cap is aimed at limiting market concentration and over-leveraging or taking on excessive debt, the report added.

The new bundling model for airport auctions pairs major revenue-generating airports with smaller, loss-making ones. This allows private concessionaires to use profits from high-traffic hubs to cross-subsidise the operating and capital expenses of smaller airports.

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At its 149th meeting on August 4, the Public Private Partnership Appraisal Committee granted in-principle approval to the privatisation of five such airport bundles, each to be awarded to a single concessionaire.

The Centre planned the cap so that the airport bundles can be awarded to a single bidder to address concerns over market concentration and over-leveraging. The Ministry of Civil Aviation informed the Ministry of Finance that the modalities of this cap are still being finalised. The meeting record did not specify how many bundles one bidder will eventually be allowed to win.

The five bundles are Amritsar-Kangra, Varanasi-Gaya-Kushinagar, Bhubaneswar-Hubballi, Raipur-Aurangabad and Tiruchirappalli-Tirupati. The bidding process will have one-stage short-listing, with the per-passenger fee for domestic passenger throughput as the bidding parameter.

During the meeting, a senior finance ministry official raised concerns about the oligopolistic nature of the aviation sector and asked about measures to minimise risks related to concentration and over-leveraging. The MoCA replied that the number of airport bundles awarded to a single bidder would be capped to mitigate these risks, as per the report. The modalities of such capping are being finalised and will be submitted as part of the proposal seeking final recommendation by the PPPAC.

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This discussion follows the Centre's February 2019 decision to privatise six major airports: Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram and Guwahati. The Adani Group won the rights to operate all six airports for 50 years after a competitive bidding process.

India's airport market remains concentrated among a few operators. The state-run Airports Authority of India manages 129 airports, while Adani Airport Holdings operates eight airports accounting for about 24-25 per cent of passenger traffic and 33 per cent of air cargo. GMR Airports, which operates Delhi and Hyderabad airports, accounts for about 27.5 per cent of passenger traffic. Together, Adani and GMR handle more than half of India's air passengers. The airline market is similarly concentrated, with IndiGo and Tata Group-owned Air India Group accounting for about 91 per cent of domestic passengers in July 2026.