3 weeks ago
India weighs relaxing rule barring airport operators from owning airlines
Many years ago, in 2006, India made a rule for its airports.
The rule said that a company that runs an airport could not own most of an airline.
This was to stop a company from giving its own airline unfair advantages.
Twenty years later, the government is thinking about changing that rule.
Some people, like the boss of the big airline IndiGo, think changing it is a bad idea because it could hurt passengers.
Other people, like the boss of the smaller airline Akasa Air, say India needs more airlines and more investors.
Today, IndiGo alone carries about two-thirds of all passengers flying inside India.
Many older airlines, like Jet Airways and Kingfisher, have disappeared over the years.
The government hopes that changing the rule will bring in new airlines and more competition.
The big question is whether rules made long ago should change when the world changes.
The Indian government is considering relaxing a 2006 rule that bars airport operators from owning more than a 10% stake in an airline.
IndiGo promoter Rahul Bhatia warned that allowing airport operators to own airlines would create a massive conflict of interest and eventually hurt consumers.
Akasa Air CEO Vinay Dube said India needs more competition and more investors, expressing confidence that adequate safeguards can be built into the system.
IndiGo now carries about two-thirds of domestic passengers, and together with the Air India group accounts for almost 90% of domestic capacity.
The article draws a parallel with telecom, where more than 10 operators per circle consolidated into three private operators over time.
- Who
- The Indian government, IndiGo promoter Rahul Bhatia, Akasa Air CEO Vinay Dube, and airport operators such as the Adani Group and GMR Airports.
- What
- The government is considering relaxing the 2006 OMDA clause that bars airport operators from owning more than a 10% stake in an airline.
- Where
- India.
- When
- Twenty years after the rule was introduced in 2006.
- Why
- To widen the pool of potential airline promoters and encourage new entrants, since consolidation has left few competitors in the market.
Backers of Relaxation
Critics of Relaxation
Airport operators owning airlines
Backers of Relaxation
India needs more competition and more investors, and adequate safeguards can be built into the system to prevent abuse.
Critics of Relaxation
Allowing airport operators to own airlines would create a massive conflict of interest and eventually hurt consumers.
Adapting or freezing regulation
Backers of Relaxation
Regulation cannot remain frozen in 2006; rules must be recalibrated as markets change, and oversight now involves multiple agencies.
Critics of Relaxation
The concerns that shaped the OMDA, such as discrimination in slot allocation, airport charges, and terminal access, have not disappeared, so overturning the 20-year-old safeguard deserves caution.
Key facts
- Rule under review
- OMDA clause barring airport operators from owning more than a 10% stake in an airline
- Year rule introduced
- 2006
- Airports privatised in 2006
- Delhi and Mumbai
- IndiGo domestic passenger share
- About two-thirds
- IndiGo + Air India group domestic capacity
- Almost 90%
- Supports relaxation
- Akasa Air CEO Vinay Dube
- Opposes relaxation
- IndiGo promoter Rahul Bhatia
- Airport operators mentioned
- Adani Group, GMR Airports










