Akasa Air founder and chief executive Vinay Dube has expressed support for a government proposal that would allow airport operators to own and run their own airlines.
India’s Ministry of Civil Aviation is considering the change, which would relax the current rule capping airport operators’ stakes in airlines at 10 per cent.
Dube said he was ‘happy and supportive’ of the move, adding that the overarching factor was that consumers should have more choices in the aviation market.
IndiGo co-founder Rahul Bhatia has pushed back strongly against the proposal, warning it would create a ‘massive conflict of interest’ since airport operators control the allocation of slots, parking bays and other critical infrastructure to airlines.
Bhatia made the remarks during an investor call, noting there is no global precedent for airport operators also owning airlines, and arguing the arrangement would ultimately work against consumer interests.
The Adani Group, which operates Mumbai and seven other airports, and GMR Airports, which manages Delhi and four others, are widely seen as the most likely beneficiaries if the rule is relaxed, though Adani has denied reports it plans to enter the airline business.
Any change to the current ownership cap would require legal clearance from the law ministry and approval from the Union Cabinet before it could take effect.
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.
Photo by Krish Aarush, Wikimedia Commons, CC BY-SA 4.0
