Plea received to waive airline cross-holding rules

The government has received a petition to relax the constraints on airline cross-holdings, though the decision remains pending review by the civil aviation ministry. Murlidhar Mohol, the minister for civil aviation, confirmed to the Rajya Sabha that there are no blanket bans on airport operators owning significant equity in airlines. However, there are restrictions within specific contracts for private airport operators.

Adani Airport Holdings reportedly sought a waiver from the government, which bars the operator of Mumbai airport from owning more than a 10% stake in any scheduled carrier. The company, part of the Adani group, denied the media reports as "entirely baseless and factually incorrect."

The government is deliberating Adani's proposal, alongside other requests, with the intention of encouraging well-capitalized airline operators and fostering competition to disrupt the dominance of IndiGo and Air India, which together command roughly 90% of India's air travel market. Any changes would necessitate Cabinet approval and likely face resistance from existing airlines.

Moreover, it would draw intense scrutiny from competition authorities, as it could potentially undermine fair competition and provide an unfair advantage to private operators, particularly in slot allocation.

For instance, Rahul Bhatia, co-founder and managing director of IndiGo, the nation's largest airline, expressed concern that any such move would negatively impact consumers. He argued that it would introduce a significant conflict of interest and, over time, serve the interests of the operators rather than the passengers.