India is considering a significant change to its aviation policy that could allow airport operators to own and operate airlines, marking a departure from long standing ownership restrictions. According to Bloomberg, discussions are underway within the Ministry of Civil Aviation to relax existing rules that currently prevent the operators of Delhi and Mumbai airports from holding more than a 10 percent stake in an airline.
If approved, the policy could enable Adani Group and GMR Airports to establish their own carriers. Adani operates Mumbai airport along with seven other airports across India, while GMR manages Delhi airport and four additional airports.
The proposed reform is aimed at increasing competition in India’s domestic aviation market, where IndiGo and Air India together control nearly 90 percent of passenger capacity. Over the past decade, the market has consolidated following the collapse of Jet Airways and Go First, along with the merger of Vistara and AirAsia India into Air India under the Tata Group.
Officials believe allowing new airline ownership by major airport operators could encourage more competition as India prepares for strong growth in air travel. The government plans to increase the number of airports to 350 by 2047, while the International Air Transport Association projects that passenger numbers will almost triple compared with 2024 levels by 2044.
However, the proposal also raises regulatory concerns. Airport operators that own airlines could potentially influence slot allocation, terminal access or other operational decisions in ways that benefit their own carriers. Any policy change is therefore expected to undergo legal review and require approval from the Union Cabinet.
The aviation industry also faces challenges beyond regulation. Global aircraft shortages caused by production delays at Airbus and Boeing continue to limit airline expansion plans worldwide. Even if new airlines receive approval, acquiring aircraft could remain a major obstacle. The proposal highlights India’s effort to balance greater competition with regulatory oversight as it prepares for the next phase of growth in one of the world’s fastest expanding aviation markets.
Source: Economic Times
