From The Economic Times · ET Bureau · · 1m
Government Cautiously Weighs Adani Airline Plan
Adani Group seeks airline entry but government fears airport ownership conflicts
In brief
Adani Group seeks airline entry but government fears airport ownership conflicts Government will review Adani's airline proposal due to potential airport-airline conflicts Originally reported by The Economic Times.
Government cautious on Adani airline plan
Civil aviation minister Ram Mohan Naidu said the government will weigh Adani Group's airline request carefully due to potential airport-airline conflicts.
“We need to create a system that addresses those concerns. There are several advantages, but the matter is under deliberation.”
Adani seeks clause removal
Adani Group wrote in June to remove a clause restricting airport operators from holding more than 10% stake in airlines.
“Adani Defence & Aerospace was evaluating starting an airline as a natural extension of the group's existing aviation ecosystem.”
Airport ownership concerns
Government officials warn cross ownership could harm customers long-term as airports are natural monopolies.
“Allowing a company which owns one of the largest airports in the country to start an airline has to be cautiously weighed.”
IndiGo opposes cross ownership
IndiGo's managing director said cross ownership would create conflict of interest and hurt consumers.
“It typically would reflect a massive conflict of interest, and over a period of time, it would actually be against the interest of consumers.”
UDAN scheme boost
The government plans to use the UDAN scheme to encourage regional airlines with subsidies for unprofitable routes.
“We want at least five airlines to operate with 100 planes each. There should be airlines which operates in specific regional geographies.”
Strict airport criteria
Second phase of UDAN requires airports to meet strict criteria including proximity to tourist spots and infrastructure readiness.
“Proposed airports will be scored on multiple criteria, including proximity to tourist spots, industrial corridors or major airports.”
Here's the gist
Government will review Adani's airline proposal due to potential airport-airline conflicts
