Akasa backs airport-owned airline plan as IndiGo flags conflict of interest

Akasa Air founder and CEO Vinay Dube has backed a government proposal that would let airport operators own and run their own airlines.

The Ministry of Civil Aviation is considering the change, which would relax the current cap limiting airport operators to a 10 per cent stake in any airline.

Dube said he supported the move, framing the priority as giving consumers more choice in India’s aviation sector.

IndiGo co-founder Rahul Bhatia has pushed back against the proposal, calling it a ‘massive conflict of interest’ since airport operators control the allocation of slots, parking bays and other 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, not for, consumers.

Adani Group, which runs Mumbai and seven other airports, and GMR Airports, which operates Delhi and four others, are viewed as the likeliest beneficiaries, although Adani has denied plans to enter the airline business.

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.

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.

Photo by Krish Aarush, Wikimedia Commons, CC BY-SA 4.0