Who Gets to Own the Skies? India's Airport-Airline Ownership Fight Splits the Industry

What the rules actually say

One of the more revealing aspects of the ministry's statement is what it clarified about the existing rulebook. There is, it turns out, no blanket government policy barring airport operators from owning airlines. The restrictions that matter are contractual, embedded in the public-private partnership concession agreements signed when individual airports were privatised. The Delhi and Mumbai concessions, for instance, cap the airport operator's stake in any airline at 10 percent — a firewall written in when those airports were handed to private hands, designed to stop the gatekeeper from also becoming a competitor to its own customers.

That distinction — policy versus contract — matters enormously for how this plays out. Changing a national policy would require public consultation and invite scrutiny. Granting a waiver from a concession agreement is an administrative act, negotiated between the operator, the AAI, and the ministry. The request now sitting with the AAI takes the second path.

The context is hard to ignore. The Adani Group has operated airports since 2019 and now runs eight of them, including Mumbai, India's second-busiest. Bloomberg reported in July that government discussions could clear a path for both Adani and GMR to have their own carriers. Adani has publicly denied plans to launch an airline. But conglomerates do not typically seek waivers for hypothetical situations.

IndiGo's alarm

The most forceful opposition has come from the company with the most to lose. Rahul Bhatia, IndiGo's co-founder and managing director, has been blunt in a way Indian corporate leaders rarely are about live policy questions.

"There is no global precedent. Typically, there is a massive conflict of interest, and over a period it will be against the interest of the consumers," Bhatia said of the proposal.

Strip away the self-interest — and IndiGo, which together with the Air India group controls roughly 92 percent of the domestic market, has plenty — and the substance of the argument still deserves attention. An airport operator controls the scarcest resources in aviation: slots, gates, terminal space, and the charges levied on every departing passenger. An airline owned by that operator would negotiate for those resources with its own parent, while its competitors negotiated with a landlord who is also their rival. Every slot allocation at a congested airport like Mumbai, every gate assignment, every dispute over airport charges would carry the suspicion of favouritism, whether or not favouritism occurred.

Aviation history offers few clean tests of the model precisely because most major markets have avoided it. Vertical separation between infrastructure and operations is the default architecture in the United States and Europe, enforced by a mix of regulation, competition law, and airport governance structures. India would be conducting a live experiment.

Akasa's welcome mat

Standing on the other side of the argument is the youngest of India's national carriers. Akasa Air chief executive Vinay Dube, whose airline turned four this month, has said Akasa would support the change, framing it as a competition question rather than a governance one. India, in his telling, needs more airlines, and the government's policies have been aimed at producing them; any policy that promotes competition is one Akasa supports.

The position is less paradoxical than it first appears. Akasa is a small carrier in a market dominated by two giants. From where Dube sits, the concentration problem is not a hypothetical future conglomerate — it is the present-day reality of a market where two groups control nine of every ten domestic seats. A deep-pocketed new entrant, even one with structural advantages, fragments the duopoly that squeezes everyone else. Akasa also does not own the airports it depends on, so it will live with whatever conflicts emerge either way; it may as well have more competition against the giants in the bargain.

There is also a simpler reading: airlines that need friendly relationships with airport operators — and every growing airline does — have little to gain from opposing those operators' ambitions in public.

The duopoly problem the government is trying to solve

The government's interest in the idea is not mysterious. Indian domestic aviation has consolidated dramatically. Jet Airways died in 2019, Go First collapsed in 2023, SpiceJet has shrunk to a shadow of its former self, and the Tata group folded Vistara and Air India Express's siblings into a consolidated Air India. What remains is a market where IndiGo and the Air India group hold roughly 92 percent between them — a duopoly-like structure that analysts have flagged as a systemic vulnerability, one where a single airline's operational crisis can strand a nation.

Regulators have been trying to seed new entrants: the DGCA has issued no-objection certificates to new and expanding operators, and smaller players like Fly91 have been nurtured. But building an airline from scratch in India is brutally capital-intensive, and the graveyard of failed Indian carriers is long. From the ministry's perspective, the only entities in India with the balance sheets, infrastructure expertise, and appetite to build a third force at scale may be the very conglomerates that run the airports.

That is the uncomfortable trade at the centre of this debate. India can keep its clean separation between airports and airlines and accept that the duopoly may persist for a decade. Or it can invite the conglomerates in and accept a new kind of concentration — one where, as critics have framed it, a single group could control the skies, the gates, and everything in between.

What to watch next

Three things will determine how this resolves. First, the AAI's handling of the waiver request: the ministry says the matter has not been examined, but the request will not sit in a drawer forever, and how it is processed — quietly or with public consultation — will signal the government's intent. Second, whether the government pairs any relaxation with structural safeguards: slot-allocation transparency, independent economic regulation of airport charges, or ring-fencing requirements between an operator's airport and airline businesses. India's airports are already subject to tariff regulation by AERA, but slot governance at private airports is a murkier affair. Third, whether Adani's public denials of airline ambitions survive contact with an actual rule change.

The precedent question cuts both ways, and it is worth being honest about that. Bhatia is right that no major aviation market has embraced airport-airline cross-ownership at scale. But India has repeatedly shown a willingness to write its own rulebook when the market structure demanded it — and with a domestic market forecast to need thousands of new aircraft over the next two decades, the stakes of getting the structure right are enormous. Whatever the ministry decides on this waiver will shape not just who flies in India, but who profits from every link in the chain that gets an Indian passenger off the ground.

Sources

• Business Today — Centre says airport operators can own airlines, confirms waiver request received by AAI
• Bloomberg — India Talks May Let Adani and GMR Own Airlines and Run Airports
• Bloomberg — India's Akasa Backs Plan to Let Airport Operators Own Airlines
• Skift — IndiGo Co-Founder: Airport-Airline Ownership Is a 'Massive Conflict of Interest'
• Business Standard — India needs more competition in aviation, says Akasa Air CEO Vinay Dube
• Business Today — 'Want consumers to have more choices': Akasa CEO on govt proposal
• Aviation A2Z — Akasa Air Backs Major Rule Change That Could Let Indian Airports Own Airlines