India’s largest airline thinks its largest airport operator shouldn’t be running an airline

IndiGo, India’s largest airline by market share, thinks that the Adani group, India’s largest airport operator, must not be running an airline.

“There is no global precedent for this,” Rahul Bhatia, the managing director of IndiGo, said on July 23 in response to growing speculation that the government is considering private airport operators to own and run airlines. “It raises significant conflict-of-interest concerns, and it is unclear how such a move would serve consumers’ interests.”

On July 23, reports had emerged that the Adani group is reportedly firming up plans to start an airline.

The company had reportedly approached the government, seeking a dilution in policy that restricts airport operators ‌from holding stakes in scheduled airlines. If approved, it would allow the $191 billion group to enter India’s duopolistic airline market, where Air India and IndiGo together control some 90% of the market.

Under the current rules, private airport operators cannot own more than a 10% stake in any airline. A spokesperson for Adani did not comment on Fortune India’s query on the speculation.

IndiGo’s concerns come at a time when InterGlobe Aviation, the parent of IndiGo, reported a standalone net loss of ₹382 crore for the first quarter of FY27 as soaring aviation turbine fuel (ATF) prices, adverse foreign exchange movements and disruptions arising from the Middle East conflict weighed heavily on profitability, overshadowing robust revenue growth.

The Adani group had forayed into the airport business in 2019, a few months after the Indian government decided to invite private players to take over the operations, management, and development of six airports. These included Lucknow, Jaipur, Thiruvananthapuram, Mangaluru, Guwahati, and Ahmedabad after it offered higher per-passenger fees to AAI in its bids.

Then in 2020, the company acquired the Mumbai airport, a key gateway to India’s financial capital. Through its subsidiary Adani Airport Holdings Ltd (AAHL), the group acquired the Mumbai airport from Hyderabad-based GVK group. Today, the group also runs Mumbai’s second airport, the Navi Mumbai International Airport, a ₹16,700 crore greenfield airport co-developed by the group and CIDCO (26%). The airport commenced its domestic operations in December 2025 and launched its international passenger flights to destinations like Abu Dhabi shortly after.

Over the last few years, the group has also expanded its aviation business to newer frontiers, signing an agreement with Brazilian aircraft maker Embraer. Under the strategic partnership, the two companies are to develop a regional transport aircraft (RTA) ecosystem in India, in addition to collaborating on aircraft manufacturing, supply chain development, maintenance, repair and overhaul (MRO) services, and pilot training.

Days later, the Adani group also announced a strategic partnership with Italy’s Leonardo to develop a helicopter manufacturing ecosystem in the country.

There is good reason for the Adani group to target the aviation sector. By 2040, India’s passenger traffic is expected to grow sixfold to around 1.1 billion, with India’s commercial airline fleet predicted to grow from 400 in 2014 to around 2,359 in March 2040.

In the meantime, the duopoly in the skies has also meant that the government has been vocal about broadening competition. That was quite evident last year, when IndiGo, which controls around 66% of the domestic market, plunged into crisis when it was forced to cancel thousands of flights due to inadequate regulatory preparedness, stranding thousands of passengers at airports.

The woes of India’s largest passenger airline began in November, when it started cancelling flights. It soon unfolded into a nationwide catastrophe, with as many as 1,600 of its 2,200 daily flights having to be halted as IndiGo grappled with a new rest-norm implementation imposed by the Centre for flying crew. The turmoil forced the government to step in and cut IndiGo’s schedule by 10%.

Meanwhile, Air India, the second-largest airline by market share, has had a crisis of its own and has been heavily criticized for its slow turnaround after its 2021 acquisition by the Tata group. The airline has also been fighting a perception crisis following the crash of a Boeing 787 Dreamliner that proved fatal to as many as 260 people.