A government proposal to allow airport operators to own and run their own airlines has split India’s aviation industry, with Akasa Air CEO Vinay Dube expressing support and IndiGo co-founder Rahul Bhatia warning of a ‘massive conflict of interest’.

The Ministry of Civil Aviation is considering relaxing the current rule that caps airport operators at a 10 per cent stake in any airline, a change that would require law ministry clearance and Cabinet approval before taking effect.

For founders and operators in infrastructure-adjacent sectors, the dispute is a useful case study in how control over scarce, regulated infrastructure — in this case airport slots, parking bays and gate access — can become a strategic lever if the entity controlling it also competes downstream.

Bhatia’s objection, made on an investor call, centres precisely on this dynamic: an airport operator that also owns an airline would have both the incentive and the operational ability to favour its own carrier in day-to-day infrastructure allocation decisions.

Dube’s counter-framing — that more entrants mean more consumer choice — reflects Akasa’s position as a newer, smaller carrier that could plausibly benefit from a less concentrated market, where IndiGo and Air India currently control nearly 90 per cent of domestic capacity.

Adani Group and GMR Airports, which between them operate most of India’s largest airports, are seen as the biggest potential beneficiaries of any rule change, positioning this as much as a story about airport-sector business diversification as one about aviation competition policy.

Any change to the current ownership cap would require legal clearance from the law ministry and approval from the Union Cabinet before it could take effect.

Under existing rules, operators of major airports such as Delhi and Mumbai are capped at holding no more than a 10 per cent stake in any airline.

Adani Group, which operates Mumbai and seven other airports, and GMR Airports, which manages Delhi and four others, are seen as the most likely beneficiaries if the ownership cap is relaxed.

Photo by Krish Aarush, Wikimedia Commons, CC BY-SA 4.0