Government says no policy bar on airport operators running airlines
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The government on Monday informed the Rajya Sabha that there is no policy that restricts airport operators from operating scheduled airlines, but there are certain curbs in agreements related to airports operated under public-private partnerships.
The comments came against the backdrop of reports that the government is looking at allowing airport operators to own airlines, and that Adani Group, which currently operates eight airports, is keen to get into the airline business. The group had denied such reports.
"There is no such government policy restricting operators of major airports from holding substantial equity in or operating scheduled airlines.
"However, the extant contractual agreements relating to some airports under Public Private Partnership (PPP) contain certain restrictions on scheduled airlines and their group entities/associates from holding equity share of the concessionaires," Minister of State for Civil Aviation Murlidhar Mohol said in a written reply to the Rajya Sabha.
The replies were to questions from CPI-M member John Brittas on whether the government is considering any amendment or relaxation of the existing policy restricting operators of major airports from holding substantial equity in or operating scheduled airlines.
The minister also said the Airports Authority of India (AAI) has received a request seeking waiver of the relevant agreement provision, but the matter "has not yet been examined by the Ministry of Civil Aviation".
Under the Operation, Management and Development Agreement (OMDA) for major airports operated through public-private partnerships (PPPs), there are restrictions in terms of airport operators having ownership in airlines.
Key airports, including in Delhi and Mumbai, are operated under PPPs where AAI is also a stakeholder.
According to reports, Adani Group had written to the AAI seeking relaxations with respect to entering into the airline business.
On July 24, Adani Group denied media reports and market speculation that it is planning to enter the airline business.
On July 23, IndiGo Co-Founder and Managing Director Rahul Bhatia said there would be a "massive conflict of interest" if airport operators are allowed to own airlines.
On August 5, Akasa Air CEO Vinay Dube told PTI that the airline will be supportive of a proposal to allow airport operators to own airlines, as the government will take into account the "considerations" involved before taking a decision since India needs more competition in aviation.
India is one of the world's fastest-growing civil aviation markets.