3 weeks ago

India weighs relaxing rule barring airport operators from owning airlines

India weighs relaxing rule barring airport operators from owning airlines
Are yesterday’s rules today’s problem? · financialexpress.com

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.

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

Sources

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