The Adani Group has approached the Central government seeking a relaxation of a provision that currently restricts operators of Delhi and Mumbai airports from holding more than a 10% stake in a scheduled airline. If approved, the move could enable the conglomerate to launch its own airline and further expand its footprint in India’s aviation sector.
According to government officials and industry executives, the Centre is examining the proposal and has sought the opinion of Solicitor General Tushar Mehta on whether the clause, introduced during the privatisation of Delhi and Mumbai airports in 2006, can be amended retrospectively. Any modification to the agreement would require approval from the Union Cabinet.
The Adani Group already has a significant presence in aviation through airport operations, pilot training, aircraft maintenance and repair (MRO), and ground handling services. It operates eight airports across India, including Mumbai airport, where it holds a 74% stake. Delhi airport, meanwhile, is majority-owned by GMR Airports.
Government officials indicated that allowing a financially strong player to enter the airline business could increase competition in the domestic aviation market, which is currently dominated by IndiGo and Air India, together accounting for nearly 90% of passenger traffic.
The proposal is also believed to be linked to Adani’s plans to establish an aircraft manufacturing facility in partnership with Brazilian aerospace company Embraer. Industry sources said the project would require substantial aircraft orders to become commercially viable, making an airline venture strategically attractive.
“No concrete decisions have been taken but there is no doubt that there is synergy for the group to start an airline,” said a senior Adani executive. “The suggestion to the government was to have an enabling provision so that there are no restrictions.”
However, the proposal is expected to face resistance from existing airlines, which have raised concerns over potential conflicts of interest, particularly regarding airport slot allocation. Aviation industry executives argue that an airport operator owning an airline could gain an unfair competitive advantage.
Government officials, however, said any amendment would include safeguards to maintain operational independence between airport and airline businesses. These may include strict separation of management, restrictions on sharing commercially sensitive information and measures to ensure transparent slot allocation in line with existing aviation regulations.
Source: The Economic Times
