India’s aviation industry could be in the midst of a major shake-up, as the Centre is now mulling a policy change that would allow airport operators to own and operate airlines. If the proposed relaxation happens, big infrastructure firms like Adani Group and GMR Airports would enter the airline business and create new competition to IndiGo and Air India.
There are discussions in the Ministry of Civil Aviation on changing rules that limit airport operators to owning significant shares in airlines. In the present system, the operators of major airports, such as those in Delhi and Mumbai, can’t own more than 10 percent of an airline.
The development comes at a time when India’s airline industry is highly concentrated. IndiGo and Air India together control almost 90 percent of the country’s domestic aviation capacity, making new large players a potentially significant development for competition, fares and connectivity.
Adani Group could be the biggest beneficiary of any policy change. The airport business operates Mumbai airport and several other airports across India. GMR Airports operates Indira Gandhi International Airport and several other airports in Delhi. Both groups have years of experience in managing aviation infrastructure, passenger services and airport-related businesses.
Even if they are willing to own airlines, competition and conflicts of interest could be a concern. Industry experts and regulators would probably look at whether airport-owning companies would give preference to their own airlines through airport slots, landing charges, terminal facilities or other operational arrangements.
As a result, this proposal would therefore require careful legal and regulatory consideration. Any changes to the current policy ought to be approved by the Law Ministry before it goes to the Union Cabinet for final approval.
In other parts of the world the airport-airline ownership model has had mixed results. While some countries have allowed some forms of common ownership, competition rules and regulatory safeguards often limit the extent to which airport operators can favour airlines connected to them.
Adani and GMR, however, have the opportunity to make a huge expansion beyond airport infrastructure. The two groups already have deep knowledge of the aviation ecosystem, and an airline could allow them to build an integrated business covering airports, passenger services and air travel.
GMR Airports too has shown a strong financial performance. The company saw a consolidated net profit of ₹400.49 crore in the fourth quarter of FY26, compared with a net loss of ₹252.66 crore in the same quarter a year earlier. In the same year-ago period, revenues rose 37.54 per cent to ₹3,938.16 crore and EBITDA rose 38 per cent to ₹1,549.42 crore.
If the Centre approves the proposed policy change, India could soon see two powerful airport operators enter the airline industry and bring in more competition and shake up the country’s entire airline sector.
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