The Adani Group has approached the Centre seeking changes to a rule that prevents operators of Delhi and Mumbai airports from owning more than a 10 per cent stake in a scheduled airline, according to a report by The Economic Times.

If the proposal is approved, it could enable the conglomerate to launch its own airline, potentially increasing competition in India’s aviation market, which is currently dominated by IndiGo and Air India.

Adani Seeks Relaxation of Ownership Rule

According to the report, Adani has requested dilution of a clause introduced when Delhi and Mumbai airports were privatised in 2006.

The provision bars operators of India’s two busiest airports from holding more than a 10 per cent stake in a scheduled airline.

The report said the Ministry of Civil Aviation has sought the opinion of Solicitor General Tushar Mehta on whether the clause can be amended retrospectively. Any change to the provision would require approval from the Union Cabinet.

Expansion Across Aviation Ecosystem

The report said the proposal aligns with Adani Group’s broader expansion in the aviation sector.

Besides operating eight airports, the group has established businesses in pilot training, aircraft maintenance, repair and overhaul (MRO), and ground handling services. It also owns a 74 per cent stake in Mumbai International Airport, while GMR Airports remains the majority owner of Delhi airport.

According to people familiar with the matter, cited by The Economic Times, Adani’s interest is also linked to its proposed aircraft manufacturing partnership with Brazilian aerospace company Embraer.

The report said the group has found it difficult to secure sufficient orders for Embraer aircraft from existing airlines and believes operating its own airline could improve the commercial viability of the proposed manufacturing venture.

A senior Adani executive quoted by the publication said there was “no doubt” that operating an airline would create synergies with the group’s existing aviation businesses. However, the executive added that no final decision had been taken and there were no advanced discussions to acquire an existing airline.

Government Keen to Boost Competition

The report comes a day after media reports suggested the government was considering allowing airport operators such as Adani Group and GMR Airports to enter the airline business to promote greater competition.

Government officials quoted in the report said the domestic aviation market is currently dominated by IndiGo and Air India, which together account for around 90 per cent of passenger traffic, and that a well-capitalised new entrant could strengthen competition.

Existing Airlines Raise Conflict Concerns

According to the report, airline executives have expressed concerns that allowing airport operators to own airlines could create conflicts of interest, particularly in the allocation of airport slots, which determine aircraft take-off and landing schedules at congested airports.

Government officials told the publication that if the ownership restriction is eased, safeguards would be introduced to ensure an arm’s length relationship between airport operations and airline businesses.

The report said these measures could include restrictions on sharing commercially sensitive information related to slot allocation and prohibiting common key managerial personnel from serving both airport and airline entities. Officials also believe the existing slot allocation framework would help prevent any unfair competitive advantage.

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