Adani Group Seeks Government Approval to Launch Airline, Eyes Bigger Role in India's Aviation Sector

The Adani Group has approached the Government of India seeking changes to existing airport privatization agreements that currently prevent operators of major airports from owning more than a 10% stake in a scheduled airline. If approved, the move could pave the way for the conglomerate to launch its own airline and significantly expand its footprint in India's aviation sector.

The proposal comes as Adani continues to strengthen its presence across the aviation value chain, including airport operations, ground handling, pilot training, aircraft maintenance and repair (MRO), and aircraft manufacturing. A policy change would mark one of the biggest structural developments in the Indian aviation industry in recent years, potentially increasing competition in a market currently dominated by IndiGo and Air India.

Why Is Adani Seeking a Policy Change?

Under the airport privatization agreements signed in 2006, operators of Delhi and Mumbai airports cannot own more than a 10% stake in a scheduled airline.

The Adani Group has requested the government to dilute or amend this clause, enabling airport operators to establish or acquire an airline.

Government officials are reportedly consulting legal experts, including the Solicitor General, on whether the clause can be amended retrospectively. Any amendment would require approval from the Union Cabinet.

Existing Rule vs Proposed Change

Particular	Current Rule	Proposed Change
Airport operators' ownership in airlines	Maximum 10% stake	Allow airport operators to own or launch airlines
Airports Covered	Delhi & Mumbai privatization agreements	Potentially applicable after amendment
Approval Required	Existing agreement	Cabinet approval after legal review

Adani's Growing Aviation Business

Over the past few years, Adani Group has rapidly expanded its aviation ecosystem beyond airport management.

Adani's Aviation Presence

Business Segment	Current Presence
Airports Operated	8 airports across India
Mumbai Airport Stake	74%
Ground Handling	Yes
Aircraft Maintenance (MRO)	Yes
Pilot Training	Yes
Aircraft Manufacturing Plans	Proposed partnership with Embraer

The proposed airline would complement Adani's existing aviation businesses and create an integrated aviation platform.

Why Is Adani Interested in Launching an Airline?

According to industry reports, the group's interest is linked to its proposed aircraft manufacturing partnership with Brazilian aerospace company Embraer.

The manufacturing project would require a sizeable customer base to become commercially viable. Launching an airline could help create demand for aircraft produced under the proposed venture while strengthening the company's long-term aviation strategy.

Although Adani executives have indicated there are no advanced discussions to acquire an existing airline, the group wants an enabling regulatory framework that would allow it to enter the airline business when appropriate.

What Could It Mean for India's Aviation Industry?

India's domestic aviation market is currently dominated by IndiGo and Air India, which together account for nearly 90% of passenger traffic.

A financially strong new entrant backed by Adani could increase competition across domestic aviation.

Potential Impact

Potential Benefits	Potential Challenges
Increased airline competition	Concerns over airport slot allocation
Greater investment in aviation	Possible regulatory scrutiny
Better connectivity	Conflict of interest concerns
Stronger aircraft manufacturing ecosystem	Opposition from existing airlines

Why Existing Airlines May Oppose the Proposal

Several industry executives believe airlines may strongly oppose the proposed amendment.

The primary concern relates to airport slot allocation. Since Adani operates several major airports, competitors fear an airline owned by the same group could receive preferential access to valuable landing and take-off slots.

Airport slots are among the most valuable operational assets for airlines, particularly during peak travel hours.

Government Considering Safeguards

Government officials are reportedly examining safeguards to ensure a level playing field if the proposal moves forward.

Possible measures include:

• Maintaining complete operational separation between airport and airline businesses.
• Preventing sharing of commercially sensitive information.
• Restricting common senior management across airport and airline entities.
• Ensuring transparent slot allocation under existing aviation guidelines.

Officials believe India's current slot allocation framework, which protects incumbent airlines meeting utilization norms, can help prevent unfair competitive advantages.

Industry Outlook

If approved, the proposal could become one of the most significant reforms in India's aviation sector since airport privatization. Alongside expanding competition, it may also support domestic aircraft manufacturing, airport infrastructure development, and long-term aviation growth.

However, the proposal is expected to undergo extensive legal, regulatory, and competition reviews before any final decision is taken.

Why does Adani Group want to launch an airline?

The group aims to expand its aviation business and create synergies with its airport operations, maintenance services, and proposed aircraft manufacturing partnership.

What rule is Adani seeking to change?

Adani wants the government to amend a clause that restricts operators of Delhi and Mumbai airports from owning more than a 10% stake in a scheduled airline.

How many airports does Adani operate?

The Adani Group currently operates eight airports across India, including Mumbai Airport.

Why are airlines opposing the proposal?

Airlines fear potential conflicts of interest, particularly regarding airport slot allocation and competitive fairness.

Has the government approved the proposal?

No. The proposal is currently under legal review, and any amendment would require Cabinet approval.