India is considering a major policy change that could allow airport operators such as the Adani Group and GMR Airports to launch and run their own airlines, in a move aimed at increasing competition in a market currently dominated by IndiGo and Air India, reported Bloomberg.
At present, operators of Delhi and Mumbai airports are not allowed to own more than a 10% stake in an airline. Bloomberg reported that discussions are underway within the Ministry of Civil Aviation to relax these ownership restrictions. Any such move would require legal clearance from the law ministry as well as approval from the Union Cabinet.
If the proposal is cleared, it could pave the way for the Adani Group, which operates Mumbai airport and seven other airports, and GMR Airports, which manages Delhi airport along with four other airports, to enter the airline business directly.
The proposed policy change comes at a time when India's aviation market has become increasingly concentrated. According to Bloomberg, IndiGo and Air India together account for nearly 90% of the country's domestic flying capacity after the collapse of Jet Airways and Go First, and the merger of Vistara and AirAsia India with Air India.
Bloomberg said policymakers have grown concerned about the limited competition in the sector. The issue came into focus last December when IndiGo, which carries more than 60% of domestic passengers, cancelled thousands of flights due to pilot shortages. With few alternative carriers available, Indian Railways had to run special trains to transport stranded passengers.
However, allowing airport operators to own airlines could also raise concerns over fair competition. Bloomberg noted that airport operators owning airlines may be accused of giving preferential treatment to their own carriers, such as allocating prime landing and take-off slots, potentially putting rival airlines at a disadvantage.
Even if the rules are relaxed, new airlines may face challenges in expanding quickly because of the global shortage of aircraft. Delivery delays at Airbus and Boeing continue to affect airline expansion plans worldwide as supply chain disruptions persist.
Bloomberg also mentioned that India plans to increase the number of airports in the country to 350 by 2047. At the same time, the International Air Transport Association (IATA) expects passenger traffic in India to grow by another 425 million travellers by 2044, almost tripling from 2024 levels. The government believes greater competition among airlines will be important to meet this rising demand.
Internationally, airport ownership of airlines has seen limited success. Bloomberg said that in the United States, regulations effectively prevent such ownership structures, while in the European Union, although technically allowed, strict antitrust rules have made them commercially difficult to operate.
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Published On:
Jul 22, 2026 13:58 IST