Govt May Ease Airport-Airline Ownership Rules; Adani Link Denied
The Ministry of Civil Aviation is considering relaxing restrictions that prevent airport operators from holding significant stakes in airlines, and vice versa. Officials are preparing a concept note for consultation with NITI Aayog and other ministries before any proposal is sent to the Union Cabinet.
The move comes amid media reports linking the proposed changes to the Adani Group's reported interest in entering the airline business. A letter from Adani Airports CEO Arun Bansal was cited, but Adani Enterprises has denied the reports.
What is the government proposing?
The restrictions are part of airport concession agreements, not legislation. For example, agreements for Delhi and Mumbai airports cap aggregate airline ownership in the airport operator at 10%, while those for Noida International Airport (Jewar) and Navi Mumbai allow up to 26% ownership in an airline. These provisions also restrict airport operators from acquiring stakes in airlines.
Media reports suggest the government aims to encourage new airline entrants, boost investment, and break the near-duopoly of IndiGo and Air India group. This follows IndiGo's large-scale flight cancellations in December 2025 due to pilot rostering issues.
Some reports link the changes to the Adani Group's MoU with Embraer to explore local aircraft production. Embraer says setting up a final assembly line in India depends on securing a substantial aircraft order.
How will the government address conflict-of-interest concerns?
Current agreements separate airport operators and airlines to prevent conflicts of interest, ensuring airports remain neutral. Officials say any relaxation will include safeguards to maintain an "arm's length" relationship. Measures under consideration include preventing sharing of commercially sensitive information like slot allocation data, and prohibiting common key managerial personnel in both entities.
The Adani Group is already India's largest airport operator with eight airports, accounting for 25% of air traffic. It also has a 99.98% stake in maintenance company Airworks, an agreement to buy 72.8% in pilot training firm Flight Simulation Technique Centre, and ground handling and food concessions.
How have airlines reacted?
IndiGo and Air India oppose the reported move, arguing it would create conflicts of interest and weaken competition. IndiGo MD Rahul Bhatia said there is "no global precedent" and it would hurt consumers. Air India called it "vertical consolidation" problematic, noting the Adani Group's presence across multiple aviation segments.
