Can Adani own an airline? Centre clarifies rules for airport operators

Can a company operating an airport also own an airline? The government has clarified that there is no blanket policy in India preventing airport operators from owning or operating scheduled airlines, although contractual cross-holding restrictions can still apply.

Airport operators can own airlines in India under government policy, but concession agreements may restrict such ownership. A pending waiver request has brought the issue into focus.

What has the government said?

In a written reply in Parliament, the government said there is no policy that prohibits airport operators from owning or operating scheduled airlines.

However, the Airports Authority of India (AAI) has received a request seeking a waiver from cross-holding restrictions. The Ministry of Civil Aviation has not yet examined the proposal.

Why is a waiver needed?

The distinction lies between government policy and airport concession agreements.

Some privately operated airports function under public-private partnership agreements that contain cross-holding clauses. These can restrict an airport operator from holding a specified stake in a scheduled airline unless it receives a waiver.

This means an airport operator may not be prohibited from owning an airline under national policy, but its individual airport concession agreement could still restrict such ownership.

What about Adani?

The issue gained attention after reports suggested that Adani Airport Holdings had sought a waiver from cross-holding restrictions, leading to speculation that the group could enter the airline business.

Adani Enterprises later denied that it was considering launching an airline. It said the waiver request related to provisions in its airport concession agreement and should not be viewed as evidence of plans to start an airline.

The government did not identify the applicant in its parliamentary reply.

Why does airport and airline ownership matter?

The debate is significant because airport operators and airlines can have overlapping interests in areas such as airport facilities, passenger services and access to slots.

Supporters of allowing such ownership structures argue that they could attract investment and encourage competition. Critics have raised concerns about potential conflicts of interest and whether an airport-owning company could gain an advantage for an airline under its control.

India's aviation market is currently dominated by IndiGo and the Air India Group, making any potential entry by a major airport operator particularly significant.

What happens next?

The government's clarification establishes that there is no blanket policy ban on airport operators owning airlines. The unresolved issue is whether contractual cross-holding restrictions at individual airports should be waived.

Any decision on the pending request could therefore have implications for airport-airline ownership structures and competition in India's aviation sector.

The issue highlights the difference between regulatory permission and contractual restrictions. The government does not have a blanket rule preventing airport operators from entering the airline business, but concession agreements can impose additional conditions.

If such restrictions are relaxed, policymakers would also need to consider safeguards around competition, airport access, slots and treatment of rival airlines. The debate could become more important if major airport operators seek a larger role in India's airline market.