Government reviewing cross-ownership rules for airlines and airports, says Civil Aviation Minister Naidu

The central government is weighing the pros and cons of allowing cross-ownership between airlines and airports while focusing on maintaining market balance, Civil Aviation Minister K Rammohan Naidu said on Tuesday. Speaking at an industry event, Naidu stated that no final decision has been taken on the matter and discussions remain under deliberation. The query arose following a request from the Adani group seeking a waiver from cross-ownership restrictions as it evaluates participating in the aviation sector. Naidu emphasized that the government wants more airlines to enter the market to give passengers more options, noting that operating airports and airlines together requires careful study to handle potential negative impacts. While no blanket policy completely blocks airport operators from holding equity in airlines, specific cross-holding caps exist in contracts for private-run airports like the Mumbai facility operated by the Adani group. Last month, the Ministry of Civil Aviation informed Parliament that the state-owned Airports Authority of India received a request for a waiver of this cross-holding cap provision. India's aviation sector currently faces a duopoly with IndiGo and the Air India group holding a cumulative domestic market share of over 90 percent. In June, Adani Airport Holdings CEO Arun Bansal wrote to the Airports Authority of India chairman seeking a waiver or clarification in the Mumbai airport agreement to allow the group to invest in or control a scheduled airline. Bansal argued that granting the waiver would help create an additional large-scale airline, boost competition, and improve regional connectivity, adding that airport neutrality can be protected through existing safeguards. However, the move faces strong pushback from industry figures. IndiGo Managing Director Rahul Bhatia warned in July that allowing airport operators to own airlines creates a massive conflict of interest against consumer interests and lacks global precedent. Experts also point to potential pitfalls regarding fair competition and non-discriminatory access, noting that any such regulatory change would require Union Cabinet approval and stringent oversight.