Akasa Air founder and CEO Vinay Dube has voiced support for 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 ease the current cap limiting airport operators to a 10 per cent stake in any airline.
Dube said he was supportive of the move, framing it around giving consumers greater choice in India’s aviation market.
IndiGo co-founder Rahul Bhatia has opposed the idea, calling it a ‘massive conflict of interest’ given that airport operators control the allocation of slots, parking bays and other essential infrastructure to airlines.
Speaking on an investor call, Bhatia said there was no global precedent for such an arrangement and argued it would ultimately hurt, rather than help, consumers.
Adani Group, which runs Mumbai and seven other airports, and GMR Airports, which operates Delhi and four others, are seen as the likeliest beneficiaries of any relaxation, although Adani has denied plans to launch an airline.
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.
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.
Photo by Krish Aarush, Wikimedia Commons, CC BY-SA 4.0
Discover more from Times Release
Subscribe to get the latest posts sent to your email.