Adani Group Considers Entering India's Aviation Market
The conglomerate is reportedly weighing the launch of a new airline and has requested a relaxation of India's ownership limits to facilitate the move.
India's aviation market is dominated by IndiGo and Air India, creating a concentrated competitive landscape that any new entrant would need to navigate. This market structure forms the backdrop for billionaire Gautam Adani's reported consideration of launching an airline, as his conglomerate weighs entering a sector where two carriers hold commanding positions.
The Adani Group has formally asked the government to relax a rule that bars operators of the Delhi and Mumbai airports from holding more than a 10% stake in a scheduled airline, a move that could clear the path for the conglomerate to launch its own carrier (Google News India). The request targets a clause attached to the 2006 privatisation of the country’s two busiest airports, which was designed to prevent conflicts of interest between airport operators and airlines. Adani Enterprises holds a 74% stake in Mumbai International Airport, while GMR Airports controls the majority of Delhi International Airport (Google News India).
The Ministry of Civil Aviation is currently seeking the opinion of Solicitor General Tushar Mehta on whether the clause can be amended retrospectively, a step that would ultimately require Cabinet approval (Google News India). Government officials cited in reports indicate the Centre is keen to encourage greater competition in a domestic market where IndiGo and Air India together account for roughly 90% of passenger traffic (Google News India). The prospect of a well-funded new entrant is seen by some officials as a way to deepen the market, though the proposal is expected to face strong resistance from existing carriers who have raised conflict-of-interest concerns (Google News India).
The conglomerate’s push into aviation has been building for several years. Beyond operating eight airports, Adani has established businesses in pilot training, aircraft maintenance and repair, and ground handling (Google News India). A senior Adani executive acknowledged there is "no doubt" there are synergies in operating an airline, but stressed that no concrete decision has been taken and there are no advanced discussions to acquire an existing carrier (Google News India). The executive said the group’s suggestion to the government was to create an enabling framework without ownership restrictions (Google News India).
The airline ambition is also linked to a proposed aircraft manufacturing partnership with Brazilian planemaker Embraer. According to people familiar with the matter, the group has struggled to generate sufficient interest from existing airlines to purchase Embraer aircraft and believes an in-house carrier could help make the manufacturing project commercially viable (Google News India). Reuters reported that Adani is weighing the launch in a market defined by a duopoly, citing sources familiar with the deliberations (Reuters India).
Google News India·Reuters India