Centre says airport operators can own airlines, confirms waiver request received by AAI

The Civil Aviation Ministry on Monday said a request seeking a waiver from restrictions on airport operators holding equity in scheduled airlines has been received by the Airports Authority of India (AAI).

The ministry, however, said it has not yet examined the matter.

The response came in Rajya Sabha after CPI(M) MP Dr John Brittas asked whether the government was considering relaxing rules restricting major airport operators from holding substantial equity in or operating scheduled airlines.

The ministry said there is no government policy that generally restricts airport operators from holding substantial equity in or operating scheduled airlines.

"However, the extant contractual agreements relating to some airports under Public Private Partnership (PPP) contain certain restrictions on scheduled airlines and their group entities/associates from holding Equity Share of the Concessionaires," Minister of State for Civil Aviation Murlidhar Mohol said in a written reply.

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REQUEST RECEIVED BY AAI

Mohol said a request seeking a waiver of the relevant contractual provision had been received by AAI.

"The matter has not yet been examined by the Ministry of Civil Aviation," he said.

Brittas had also asked whether the government had assessed the impact of cross-ownership on competition, conflict of interest, slot allocation, airport charges, ground handling and fair access to airport infrastructure.

He also sought details of whether the Competition Commission of India, DGCA and AAI had been consulted.

The ministry did not provide any such assessment or consultations, saying the matter had not yet been examined by it.

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ADANI AIRLINE REPORTS

The development comes amid reports that the Adani Group was seeking a waiver from rules that restrict airport operators from owning stakes in scheduled airlines.

Adani, however, has denied plans to enter the airline business.

In an exchange filing last month, the company said it was "not evaluating any proposal to enter the airline business".

"We would like to categorically deny recent media reports and market speculation suggesting that the Company is planning to launch an airline. The reports are entirely baseless and factually incorrect," it said.

The Adani Group entered the airport business in 2019. Through Adani Enterprises, it now operates eight airports in India, including Mumbai, Jaipur and Thiruvananthapuram.

‘MASSIVE CONFLICT OF INTEREST’

IndiGo founder and managing director Rahul Bhatia had last month raised concerns over reports of the Adani Group seeking a change in the rules.

Addressing IndiGo's Q1FY27 earnings call, Bhatia said such a move could create a conflict of interest and hurt consumers.

"There is no global precedent. Typically, there is a massive conflict of interest, and over a period it will be against the interest of the consumers," Bhatia said.

He added that it would have to be seen whether the reports were true and whether the existing rules were amended.