Adani wants to launch own airline, will counter IndiGo-Air India duopoly

The Adani Group has formally approached the central government requesting the relaxation of a long-standing ownership clause that restricts operators of Delhi and Mumbai airports from holding more than a 10% stake in a scheduled airline. Originally introduced during the 2006 privatization of the two major airport hubs, the rule currently limits major airport operators from entering the commercial airline space. If approved, the policy revision could pave the way for the conglomerate to establish its own carrier and challenge the dominant market presence of IndiGo and Air India, which together control roughly 90% of domestic passenger traffic.

The proposal aligns with the government's broader objective to foster greater market competition and curb the existing near-duopoly in India's domestic aviation sector. The Ministry of Civil Aviation is currently seeking legal advice from Solicitor General Tushar Mehta to determine whether the privatization clause can be amended retrospectively, a step that would ultimately require federal Cabinet approval. Beyond expanding its existing ecosystem of eight airports, ground handling, and maintenance facilities, the Adani Group reportedly views launching an airline as a crucial step to support its proposed aircraft manufacturing partnership with Brazilian planemaker Embraer.

However, the potential rule change is expected to face resistance from existing airlines over potential conflicts of interest, particularly regarding the fair allocation of valuable airport take-off and landing slots. In response to these industry concerns, government officials indicated that if the clause is amended, strict regulatory safeguards would be implemented. These measures would enforce an arm's-length relationship between airport management and airline operations, prohibiting shared managerial personnel and restricting the exchange of commercially sensitive slot allocation data.