Akasa Air founder and CEO Vinay Dube has supported a government proposal that would let airport operators own and run their own airlines.
The Ministry of Civil Aviation is weighing the change, which would relax the existing rule limiting airport operators to a 10 per cent stake in any airline.
Dube said he was supportive of the move, saying the focus should be on giving consumers more choice in the aviation market.
IndiGo co-founder Rahul Bhatia has criticised the proposal, calling it a ‘massive conflict of interest’ since airport operators control the allocation of slots, parking bays and other critical infrastructure to airlines.
Bhatia, speaking on an investor call, said there was no global precedent for the arrangement and argued it would ultimately work against consumer interests.
Adani Group, which operates Mumbai and seven other airports, and GMR Airports, which manages Delhi and four others, are seen as the most likely beneficiaries, though Adani has denied plans to enter the airline business.
The proposal comes at a time when IndiGo and Air India together control nearly 90 per cent of India’s domestic aviation capacity, following a wave of consolidation in recent years.
Media reports of the proposal first emerged from discussions involving GMR and Adani groups seeking regulatory changes, prompting the current round of public debate among aviation industry executives.
The government has not yet indicated a timeline for finalising a decision on whether to relax the ownership cap for airport operators.
Any change to the current ownership cap would require legal clearance from the law ministry and approval from the Union Cabinet before it could take effect.
Under existing rules, operators of major airports such as Delhi and Mumbai are capped at holding no more than a 10 per cent stake in any airline.
Adani Group, which operates Mumbai and seven other airports, and GMR Airports, which manages Delhi and four others, are seen as the most likely beneficiaries if the ownership cap is relaxed.
Photo by Krish Aarush, Wikimedia Commons, CC BY-SA 4.0
