No General Policy Bars Airport Operators from Owning Airlines, Government Tells Parliament
NEW DELHI:India has no overarching policy preventing major airport operators from owning or running scheduled airlines, the government clarified on Monday, though specific public-private partnership contracts continue to enforce cross-ownership restrictions.
The Ministry of Civil Aviation confirmed in a written reply to the Rajya Sabha that existing regulations do not prohibit airport developers from holding substantial equity in commercial carriers. However, contractual agreements signed under the Public-Private Partnership (PPP) model place distinct limits on airline entities holding equity in airport concessionaires.
Minister of State for Civil Aviation Murlidhar Mohol stated that while no blanket prohibition exists in federal policy, individual concession agreements dictate specific shareholding parameters.
“There is no such Government Policy restricting operators of major airports from holding substantial equity in or operating scheduled airlines,” Mohol said in his written response. “However, the extant contractual agreements relating to some airports under Public Private Partnership contain certain restrictions on scheduled airlines and their group entities or associates from holding equity share of the concessionaires.”
The clarification comes as the Airports Authority of India (AAI) evaluates a formal application seeking to bypass these contractual barriers. An unnamed entity submitted a request to waive specific cross-ownership clauses embedded in an airport concession agreement, a move that could clear the path for airport operators to enter the airline sector directly.
The ministry confirmed receipt of the application through the AAI but noted that executive evaluation remains pending.
“Request seeking waiver of the relevant agreement provision has been received by Airports Authority of India,” Mohol said. “The matter has not yet been examined by the Ministry of Civil Aviation.”
PPP concession agreements, such as those governing major international gateways in Delhi, Mumbai, and other metros, historically included cross-ownership caps to prevent conflicts of interest, monopolistic control over airport slots, and unfair competitive practices against non-affiliated airlines. Waiver approval would require formal policy amendments or contractual dispensations from the civil aviation ministry and relevant oversight bodies.
