Adani Group can start its own airline. For this, the group has demanded the government to change a rule, which prevents airport operators from holding more than 10% stake in an airline. The government is considering this to increase competition in the market.
Adani Group is now preparing to play another big bet in the aviation sector. The group can launch its own airline company. According to international news agency Reuters, to turn this plan into reality, Adani Group has demanded from the Central Government to change a rule. This rule prevents companies running airports like Delhi and Mumbai from holding more than 10% stake in any airline.
In fact, companies like Indigo and Air India account for 90% of the country’s domestic air travel. The government wants to break this monopoly and increase competition in the market. A few days ago there were reports that the government is considering allowing airport operators like Adani Group and GMR to start their own airlines. Now this new step by Adani has given further fuel to these speculations.
The rule that Adani wants relaxed was made in 2006 during the privatization of Delhi and Mumbai airports. Under this, the companies running these two busiest airports of the country cannot invest more than 10% in any airline. It is reported that the Civil Aviation Ministry has sought legal advice on this matter from Solicitor General Tushar Mehta whether this rule can be changed retrospectively. Ultimately, the approval of the Union Cabinet will be required to change the rules.
Why Adani’s interest?
In the last few years, Adani Group has emerged as a big player in the aviation sector. The group currently has the management of 8 airports. He has 74% stake in Mumbai Airport. Apart from this, the group is also active in businesses like pilot training, plane repair and ground handling. According to reports, Adani also has a plan with Brazilian aircraft manufacturing company ‘Embraer’ behind this new step. In fact, existing airlines are not showing much interest in purchasing Embraer planes. In such a situation, Adani feels that if he has his own airline, then this manufacturing project can also be commercially successful.
Will the Center give the green signal?
The central government also wants more competition in the domestic aviation market dominated by IndiGo and Air India. Government sources believe that the arrival of a financially strong new airline will lead to better competition in the market, which can benefit passengers.
Companies expressed protest
However, existing airline companies may stand against this proposal. They fear that if the company running the airport brings its own airline, there may be favoritism. Their concern is that the airport operator may give prime time slots to his company for taking off and landing planes. These slots are very valuable to any airline at busy airports.