The Adani Group has approached the Centre seeking a regulatory change that could clear the path for its entry into India’s airline industry. If approved, the proposal would remove a long-standing ownership restriction and potentially create a new competitor to market leaders IndiGo and Air India.

The request comes as policymakers explore ways to increase competition in India’s fast-growing aviation sector, where the two largest airlines currently account for the overwhelming majority of domestic passenger traffic.

Rule Change Could Open the Door

Under rules introduced during the privatisation of Delhi and Mumbai airports in 2006, operators of these airports cannot own more than a 10% stake in a scheduled airline.

Adani Group has reportedly asked the government to relax or amend this provision, arguing that the restriction is no longer aligned with the evolving aviation landscape.

The Ministry of Civil Aviation is understood to be examining the legal feasibility of modifying the clause. The matter has reportedly been referred for legal opinion, and any change would require approval from the Union Cabinet.

Expanding Across the Aviation Ecosystem

Over the past few years, Adani has significantly expanded its aviation footprint beyond airport operations.

The conglomerate now operates eight airports and has invested in businesses including aircraft maintenance and repair (MRO), pilot training and ground handling services. It also holds a majority stake in Mumbai International Airport, while GMR Airports controls Delhi International Airport.

Industry observers believe an airline would complement Adani’s growing aviation portfolio and create stronger integration across its businesses.

Embraer Partnership Adds Strategic Value

Another factor behind Adani’s interest is its proposed partnership with Brazilian aircraft manufacturer Embraer.

According to reports, the group has faced challenges in generating sufficient airline demand for Embraer aircraft in India. Launching its own carrier could provide an immediate customer for locally assembled aircraft and strengthen the commercial viability of the manufacturing venture.

While company officials have acknowledged the strategic advantages of operating an airline, they have also clarified that no final decision has been made and there are currently no advanced discussions to acquire an existing carrier.

Government Sees Opportunity for Greater Competition

Officials believe a financially strong new entrant could help diversify India’s aviation market, which remains heavily concentrated.

The government’s reported willingness to examine the proposal reflects broader efforts to encourage competition, improve consumer choice and strengthen the country’s aviation ecosystem.

However, any regulatory relaxation is expected to face resistance from existing airlines.

Airlines Raise Conflict of Interest Concerns

Several airline executives have expressed concerns that allowing airport operators to own airlines could create conflicts of interest.

Their primary concern relates to airport slot allocation—the scheduling of take-off and landing times—which is among the most valuable operational assets at congested airports.

To address these concerns, officials are reportedly considering safeguards that would ensure operational independence between airport and airline businesses. Proposed measures include restricting the sharing of commercially sensitive information, separating management structures and maintaining transparent slot allocation procedures.

A Potential Shift in India’s Aviation Landscape

If the ownership rule is eventually amended, it could mark one of the biggest structural changes in India’s aviation sector in nearly two decades.

For Adani Group, the move would complete its presence across nearly every segment of the aviation value chain. For passengers, it could eventually mean another major full-service competitor in a market currently dominated by just two airlines.

Whether the proposal becomes policy will depend on legal scrutiny, Cabinet approval and the government’s ability to balance greater competition with concerns over fair market practices.