Photo by Krish Aarush, Wikimedia Commons, CC BY-SA 4.0
Akasa Air’s founder and CEO Vinay Dube has backed a government proposal that would allow airport operators to own and run airlines of their own.
The Ministry of Civil Aviation is considering the change, which would relax the current rule limiting airport operators to a 10 per cent stake in an airline.
Dube said he supported the move, saying the priority should be 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 key infrastructure to airlines.
Bhatia, speaking on an investor call, said there was no global precedent for the arrangement and argued it would work against consumer interests rather than for them.
Adani Group, which operates Mumbai and seven other airports, and GMR Airports, which runs Delhi and four others, are widely viewed as the biggest potential beneficiaries, though Adani has denied plans to enter the airline business.
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.
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.
Photo by Krish Aarush, Wikimedia Commons, CC BY-SA 4.0
