No policy restricting airport operators from running airlines: Centre

The Centre said that the AAI has received a request seeking a waiver from such contractual restrictions, which could allow an airport operator to enter the airline business

The Centre on Monday said no government policy in India prevents airport operators from holding substantial equity in or operating scheduled airlines.

 

In a reply to a question by CPI(M) MP John Brittas on cross-ownership between airports and airlines, Murlidhar Mohol, Minister of State in the Ministry of Civil Aviation, said, “There is no such government policy restricting operators of major airports from holding substantial equity in or operating scheduled airlines.”

 

“However, the extant contractual agreements relating to some airports under Public Private Partnership (PPP) contain certain restrictions on scheduled airlines and their group entities/associates from holding Equity,” Mohol said.

   

The Airports Authority of India (AAI) has received a request seeking a waiver from such contractual restrictions, which could allow an airport operator to enter the airline business, Mohol said. However, he clarified that the Ministry of Civil Aviation has not yet examined the matter.

 

“Request seeking waiver of the relevant agreement provision has been received by Airports Authority of India (AAI). The matter has not yet been examined by the Ministry of Civil Aviation,” the reply read.

 

Brittas had asked whether the government was considering any amendment or relaxation of the existing policy restricting operators of major airports from holding substantial equity in or operating scheduled airlines.

 

He had also asked whether the government had assessed the impact of such cross-ownership on competition, conflict of interest, slot allocation, airport charges, ground handling and fair access to airport infrastructure for competing airlines, and whether the views of the Competition Commission of India, DGCA and AAI had been obtained.

 

The ministry said the matter had not yet been examined and did not provide details on these aspects.

 

The government’s response comes amid reports that Indian billionaire Gautam Adani’s group is considering entering the airline business. Business Standard reported last month that the group was weighing the launch of a new airline, but no final decision had been taken. 

 

The report added that the group is still considering whether to enter the sector, which is seen as a risky business with limited profitability.