The Airports Authority of India has received a significant waiver request regarding airport concessionaires holding equity in scheduled airlines, sparking debate over potential conflicts of interest amidst the Adani group's reported interest in the aviation sector.
Key Points
- The Airports Authority of India has received a request for a waiver from contractual restrictions on airport concessionaires holding equity in scheduled airlines.
- Minister of State for Civil Aviation Murlidhar Mohol confirmed the request in the Rajya Sabha but stated the ministry of civil aviation has not yet examined it.
- The request comes amidst speculation about the Adani group's potential entry into the airline business, despite the group's denial of such plans.
The Airports Authority of India (AAI) has received a request seeking a waiver from contractual restrictions that prevent certain airport concessionaires and their group entities from holding equity in scheduled airlines, Minister of State for Civil Aviation Murlidhar Mohol said in the Rajya Sabha on Monday.
The minister, however, said his ministry had not yet examined the request.
His statement in the Upper House of Parliament came amid controversy over the Adani group's reported interest in entering the airline business.
On June 4, Adani Airport Holdings, part of the Adani group, reportedly wrote to the government-controlled AAI seeking a waiver that would allow it and its affiliates to 'invest in, establish, acquire, own, promote or control' a scheduled airline.
Waiver Request and Adani's Denial
On Sunday, Trinamool Congress MP Mahua Moitra shared the letter on X.
The June 4 letter also sought a waiver from the restriction 'prohibiting the concessionaire, its affiliates, and/or their respective promoters from directly or indirectly investing in, establishing, acquiring, owning, promoting or controlling any scheduled airline'.
A concessionaire is a private company that has been awarded the right to operate an airport under an agreement with the government or its agency.
Adani Enterprises, however, on July 24 denied reports that it was planning to launch an airline, saying it was 'not evaluating any proposal to enter the airline business'.
Government's Stance and Unanswered Questions
The parliamentary question, raised by Communist Party of India-Marxist MP John Brittas, did not name Adani group or any other airport operator.
It asked whether the government was considering amending or relaxing the existing restrictions on airport operators holding substantial equity in or operating scheduled airlines, and whether any airport operators or other stakeholders had sought such a relaxation.
Mohol replied on Monday that there is no government policy restricting operators of major airports from holding substantial equity in or operating scheduled airlines.
He clarified, however, that contractual agreements covering some airports under the public-private partnership model contain restrictions on scheduled airlines and their group entities or associates holding equity in airport concessionaires.
'Request seeking waiver of the relevant agreement provision has been received by AAI. The matter has not yet been examined by the ministry of civil aviation,' Mohol said.
The response is remarkable because it confirms that a waiver request has reached AAI, but does not identify the entity that submitted it.
It also does not say whether the request has been accepted or whether the government has decided to change the existing framework.
Concerns Over Conflict of Interest
The issue has acquired importance because large airport operators, if they also have a stake in an airline, could become competitors to other airlines using their airports.
This can raise concerns about fair access to airport infrastructure, including flight slots, airport charges, and ground-handling facilities.
A flight slot is the designated time at which an airline is permitted to take off or land at an airport, while ground handling covers services such as aircraft turnaround, baggage handling, and other support provided to airlines at airports.
On July 23, IndiGo Promoter and Managing Director Rahul Bhatia opposed any move to allow airport operators to own airlines, saying such a model would create a 'massive conflict of interest' and could ultimately hurt consumers.
The question by Brittas in the Rajya Sabha also sought details on whether the government had assessed the possible impact of airport-airline cross-ownership on competition, conflict of interest, allocation of flight slots, airport charges, ground handling, and fair access to airport infrastructure for competing airlines.
It asked whether the views of the Competition Commission of India, Directorate General of Civil Aviation, and AAI had been obtained.
The ministry's response did not provide any such assessment.
Instead, Mohol said the matter had not yet been examined by the ministry of civil aviation.
