'Want consumers to have more choices': Akasa CEO on govt proposal allowing airport owners to run airlines

Your local airport running its own airline — sci-fi or the next big shift in Indian aviation? Akasa Air is betting on the latter. Founder-CEO Vinay Dube has backed a proposal letting airport operators own airlines, saying the government will factor in every consideration before deciding. If approved, it could change the skies as we know them.

Can airport operators own airlines in India?

In an interview with PTI on Wednesday, Dube said India needs more competition in aviation and more choices for consumers. He said he was confident the government was aware of the issues involved when a private enterprise owns both an airport and an airline.

“I am happy and supportive of this move,” he said, while adding that the government would account for such considerations when framing the policy.

"But I am 100 per cent sure that the government is cognisant of these (considerations) and will account for these as it creates its legislation. But the overarching factor is that as a nation, you know, we want consumers to have more choices," Dube said.

What is the government's proposal on airport operators owning airlines? 

The Ministry of Civil Aviation has started discussions on a policy change that would allow airport operators to own and run airlines. At present, operators of the Delhi and Mumbai airports cannot hold more than a 10 per cent stake in any airline, the people said.

Any relaxation is expected to need legal clearance from the law ministry and approval from the Union Cabinet led by Prime Minister Narendra Modi.

If the rules are eased, the change could open the way for groups such as Adani Group and GMR Airports Ltd to own carriers. Adani Group operates Mumbai airport and seven others, while GMR manages Delhi airport and four more facilities in India.

Why are some airlines opposing this proposal? 

The proposed move is aimed at widening competition in a market where IndiGo and Air India together account for nearly 90 per cent of domestic capacity. At the same time, it has raised concerns that airport operators could favour their own airlines in slot allocation.

On July 23, IndiGo co-founder and managing director Rahul Bhatia said there would be a “massive conflict of interest” if airport operators were allowed to own airlines. A day later, Adani Group denied media reports and market speculation that it planned to enter the airline business.

How could this change affect India's aviation sector?

India remains one of the world’s fastest-growing domestic aviation markets, but the number of airlines has reduced sharply over the past decade. The collapse of Jet Airways and Go First, along with the merger of Vistara and AirAsia India under the Tata Group, has strengthened the dominance of IndiGo and Air India.

Akasa Air, which has a fleet of 40 Boeing 737 aircraft, will complete four years of operations on Friday. In a written reply to the Rajya Sabha on August 3, Civil Aviation Minister K Rammohan Naidu said the government is committed to supporting the expansion of existing airlines and facilitating the entry of new operators.