Newsletter
India's aviation market could soon get a powerful new player.
The Adani Group has asked the government to relax rules that stop certain airport operators from owning airlines. If approved, the move could allow Adani to launch its own airline and challenge the dominance of IndiGo and Air India.
What's happening: the company wants the government to amend a rule that prevents operators of Delhi and Mumbai airports from owning more than a 10% stake in a scheduled airline.
The proposal is currently being reviewed by the Civil Aviation Ministry and will also require approval from the Law Ministry and the Union Cabinet before any changes can be made.
Why it matters: Adani already operates eight airports, including Mumbai and Navi Mumbai, and is investing ₹20,000 crore to develop airport cities across six locations. Beyond airports, it has expanded into pilot training, aircraft maintenance and repair (MRO), and ground handling, making an airline the next logical step in its aviation strategy.
The group is also investing $11 billion to expand its airport business and over $2 billion in airport-linked hotels, retail centres and office spaces. If the ownership rules are relaxed, an airline could complete Adani's vision of building an end-to-end aviation business.
The company says no final decision has been taken and there are no advanced talks to acquire an existing airline, but it wants the government to create a framework that removes the current ownership restrictions.
Policy support: the government wants more competition in a market currently dominated by IndiGo and Air India. Officials believe a well-funded entrant like Adani could give passengers more choice and make the aviation sector more competitive.
To address concerns over conflicts of interest, the government is considering safeguards such as keeping airport and airline businesses separate, restricting the sharing of sensitive information, and barring common senior management. Officials also believe the existing airport slot allocation system can help ensure a level playing field.
The bigger picture: India is one of the world's fastest-growing aviation markets, but IndiGo and Air India together control over 90% of domestic passenger traffic, leaving little room for competition.
At the same time, the industry has seen several high-profile failures, including Kingfisher Airlines, Jet Airways and Go First, highlighting how difficult the airline business can be. Even so, the government is reportedly encouraging large business groups to enter the sector to reduce dependence on the current duopoly and strengthen competition.
