Adani Group Urges India to Expand Flying Rights Amid Airline Opposition

The Adani Group is urging the central government to grant additional India international flying rights to global airlines. This move is designed to boost airport traffic across the group’s eight operational airports. The infrastructure conglomerate is investing billions of dollars in upgrading its runways and terminals.

This push for liberalization puts the Adani Group at odds with the country’s two largest carriers. Both IndiGo and Air India want the government to be cautious. They argue against opening local skies too quickly to overseas competitors.

The Airline-Airport Divide

Adani Airports Holdings, which manages eight airports, has asked the Centre to begin negotiations. The request specifically targets countries like the UAE, Saudi Arabia, Qatar, Singapore, Indonesia, and Malaysia. The goal is to increase capacity under existing bilateral air service agreements.

Competition Concerns for Domestic Carriers

Air India has been vocal in its opposition. The carrier argues that expanded access would expose it to “unfair competition.” This competition is primarily from West Asian airlines, which are often cash-rich.

Similarly, IndiGo supports the government’s cautious approach. The airline’s CEO has stated that a bilateral agreement must benefit both countries involved. This stance underscores a desire to ensure Indian carriers can grow their international networks.

Air India’s CEO also noted that a significant portion of traffic carried by some foreign carriers is transit traffic. This means passengers connect through foreign hubs instead of Indian airports.

Justifying the $11.1 Billion Investment

The Adani Group is making a substantial commitment to Indian aviation infrastructure. Jeet Adani, a director at Adani Airport Holdings, stated the group plans to spend $11.1 billion by 2030. This investment covers terminals, runways, and passenger amenities.

An Adani official reportedly called the restriction a “criminal waste of assets.” They argue that limiting capacity penalizes Indian customers with higher airfares. The group believes increasing capacity is key to transforming India's financial capital into a global aviation hub.

Navi Mumbai Airport Launch

The group recently began commercial operations at the Navi Mumbai International Airport (NMIA) on December 25. The new facility handled over 25,000 passengers in its first five days of service. This initial traffic highlights the demand for greater capacity in the Mumbai region.

India’s Guarded Aviation Policy

International flying rights are allocated on a reciprocal basis between governments. Since 2014, successive governments have maintained a guarded approach to expanding rights. This policy is particularly strict concerning West Asian carriers.

The government’s stated aim is to protect Indian airlines and develop local airports into transit hubs. This strategy mirrors the success of hubs like Dubai and Singapore’s Changi.

Under the 2016 India National Civil Aviation Policy, new rights are restricted. They will not be granted to overseas carriers unless the utilization by the Indian side reaches 80 per cent.

Impact on Capacity and Airfares

The policy has created significant airfare capacity constraints. For example, the last increase in seats for Dubai was in 2014. Both Indian carriers and airlines like Emirates and Flydubai have fully utilized their entitlements. The lack of additional capacity, despite strong traffic growth, has resulted in higher ticket prices for passengers. For more in-depth commercial aviation news, visit the flying.flights website.