Civil Aviation Ministry Evaluates Adani Groups Request to Relax Airport-Airline Cross-Ownership Norms — September 23, 2026

The central government is actively assessing the advantages and disadvantages of allowing airport operators to launch or own stakes in commercial airlines, Union Minister of Civil Aviation Kinjarapu Ram Mohan Naidu confirmed. The review follows a formal representation by the Adani Group seeking regulatory relaxation of existing cross-ownership limits.

Under the Operation, Management and Development Agreements (OMDAs) signed in 2006 when Delhi and Mumbai airports were privatised, an airport operator and its group entities cannot hold more than a 10% equity stake in a scheduled airline. The Adani Group, which holds a 74% stake in Mumbai International Airport Limited alongside operations across seven other domestic airports, has approached the Airports Authority of India (AAI) requesting a waiver from this restriction.

Government Vision for Airline Capacity

Speaking at an event in New Delhi, Minister Naidu highlighted that the government supports the entrance of new airline operators to meet expanding domestic travel demand, though it remains cautious about potential market distortion.

“The government is clear that India needs more airlines, given the number of airports going to come up in India and the demand,” Naidu said. “Our ambition is to have at least five airlines with at least 100 aircraft each. So if someone wants to start an airline, the government supports the idea. The issue is an airport doing so. We are examining the pros and cons of the same.”

Naidu pointed out that India has no blanket statutory ban on airport companies running carriers; rather, the restriction stems primarily from specific PPP concession agreements. For instance, private operators of newer airports, such as Bengaluru's Kempegowda International Airport operated by Fairfax-led BIAL, are not subject to the 2006 OMDA clause. However, amending the OMDA terms for Mumbai would require Union Cabinet approval and could face regulatory scrutiny regarding fair competition.

Industry Pushback and Conflict of Interest Concerns

The prospect of airport operators entering commercial flight operations has ignited significant controversy across the Indian airline industry:

• Conflict of interest and slot allocation: Established carriers have expressed reservations that an airport owner operating its own airline could grant itself unfair advantages, such as prime arrival and departure slots, preferential terminal gates, or advantageous ground handling fees. InterGlobe Aviation (IndiGo) promoter Rahul Bhatia previously cautioned that such cross-ownership creates an inherent conflict of interest that could harm consumers in the long run.
• Breaking the market concentration: Currently, the Indian domestic market is heavily concentrated, with IndiGo and the Tata-owned Air India group controlling the vast majority of commercial fleet capacity. Industry proponents, including Akasa Air leadership, have argued that allowing deep-pocketed infrastructure groups to launch airlines could provide much-needed capital injection and capacity expansion.
• Group clarifications: In earlier communications, Adani Airports CEO Arun Bansal indicated that Adani Defence & Aerospace was exploring an airline venture to complement its broader aviation ecosystem. Adani Enterprises has also separately indicated that while operating a standalone carrier might not be its primary intent, acquiring non-controlling strategic stakes in regional airlines could enhance passenger traffic across its airport network.

The Ministry of Civil Aviation maintains that no final policy decision has been reached. For investors, any eventual Cabinet clearance to alter the OMDA framework would mark a structural shift for India's aviation sector, reshaping route competition, hub logistics, and capital expenditure across publicly traded airport and airline operators.

Tags: Adani Enterprises InterGlobe Aviation Ministry of Civil Aviation Airports Authority of India Indian Aviation Sector