The government's move to loosen restrictions on cross-ownership between airport operators and airlines deserves deeper scrutiny as a policy choice, even when major private airport operators deny any current proposal to enter the airline industry.

The Ministry of Civil Aviation is considering whether a relaxation in cross-ownership restrictions between airport operators and airlines can be allowed. Under the present concession agreements governing Delhi and Mumbai airports, an operator is not allowed to hold more than 10% of an airline, and vice versa. However, at Noida's new Jewar and Navi Mumbai airport, the ceiling has been kept more generous at 26%. Some news reports have linked the proposed relaxation to the Adani Group's interest in flying, citing a letter from Adani Airports CEO Arun Bansal and an MoU with Embraer to explore aircraft assembly in India. Adani Enterprises has since called these reports baseless and denied any such proposal to enter airline business. IndiGo's Rahul Bhatia has publicly said there is no global precedent for such consolidation, warning it would be against consumer interests, while an Air India executive has called it a recipe for conflict of interest that kills competition and costs jobs.

But Adani's denial, however sincere, resolves little in the eyes of competition law. It is well known that a policy is often made in abstract. A rule permitting cross-ownership permits it for every airport operator and every prospective airline, and not merely the company everyone thinks of in the headlines. According to the Ministry of Civil Aviation's July 2026 dashboard, India has 30 operational airports under State Government or Private operators and Adani alone controls eight, having roughly a quarter of national air traffic, besides stakes in ground handling, MRO, and pilot training. One should not forget that a firm's present intention is a fact about today and not a seal for years to come. Evaluating the proposal only through what Adani Enterprises says it will or won't do sits uneasily.

Where the Competition Act reaches, and where it doesn't

In letter and spirit, the Competition Act, 2002, seems equipped for the issue of anti-competitive practices, which may arise due to the relaxations. Section 4(2)(e) prohibits an enterprise from using dominance in a “relevant market” to enter or protect its position in another, precisely the risk when an airport operator controlling slots, gates, and check-in counters also owns a carrier competing for those same resources. Section 4(2)(c) separately proscribes conduct that denies market access, and the factors determining whether an agreement has an appreciable adverse effect on competition under Section 19(3) - entry barriers, foreclosure of competitors, and harm to consumers - highlight exactly what IndiGo and Air India are warning about. However, protection under Section 4 comes into effect only after “dominance” is established and “abuse” is proven, which, in litigation, can run for years before the commission or the appellate courts. In a capital-starved, slot-constrained industry, a carrier squeezed out of prime Delhi or Mumbai timings may not survive long enough to be eventually vindicated by a Competition Commission of India (CCI) order.

The other protection under the act - the combination-control regime under Sections 5, 6, and 20, is ex-ante, i.e., the Commission can examine a deal before it closes, but only above asset or turnover thresholds. An airport operator taking a modest stake in a new airline, or simply floating a fresh carrier, may never trigger a notifiable combination at all, which will leave the CCI blind to the very transactions at issue. Slots, gates, and terminal counters are near-textbook examples of an essential facility infrastructure a rival cannot replicate or route around. The Commission has gestured at the 'essential-facilities doctrine' in the Arshiya/CONCOR matter and in Turbo Aviation's complaint against Bangalore International Airport, but has never affirmatively imposed a duty to deal, unlike the European Court of Justice in Bronner. Indian jurisprudence on refusal to deal in infrastructure remains underdeveloped, which is a gap this proposal would test immediately.

Caps that live in contracts, not law

The deeper problem is that these 10% and 26% caps are not statutory limits, but they are clauses in concession agreements between the government and individual operators. Airports Economic Regulatory Authority (AERA) established in 2008, regulates aeronautical tariffs and service quality, with no explicit mandate over ownership structures. The Directorate General of Civil Aviation (DGCA) licenses aircraft and airlines but does not police market structure. Cross-ownership thus sits in a regulatory void, subject to executive amendment to a contract, outside the CCI's ex-ante gaze unless a threshold is crossed, and outside AERA's tariff-focused remit altogether. A sector defined by scarce, non-substitutable infrastructure and entry barriers is governed by three regulators, but none of which holds a standing, veto grounded in competition principles.

A workable fix

Moving ownership ceilings out of individual concession contracts and into a binding regulation under the Airports Economic Regulatory Authority of India Act, 2008, so they cannot be diluted concession by concession through closed-door renegotiation. A mandate requiring CCI notification of any airport operator stake in an airline and vice versa, irrespective of asset or turnover thresholds, under the pre-merger clearance model India already uses in banking and insurance. A standing information-sharing arrangement between the CCI and AERA, similar to the information-sharing MoUs used by regulators such as SEBI with other sectoral regulators, paired with a mandatory two-year competition-impact review before any relaxation is made permanent, may be considered.

Competition law does not exist to police what a company says it intends to do; it exists to police the structures that make 'abuse' possible, regardless of intent. Whether or not any conglomerate ever boards this particular flight, unwinding decades-old separation between airport and airline without first building the machinery to watch it, would leave the Indian aviation industry more concentrated, and the Indian competition law exposed exactly where it claims to be strongest.

Views are personal.