Higher fares, idle runways: Adani Group presses government to open skies

The conglomerate plans to invest $11.1 billion by 2030 in airport infrastructure such as terminals, runways, aircraft-handling facilities and passenger amenities, Jeet Adani, director at Adani Airport Holdings, has said

• Adani Group urges govt to expand international flying rights for its 8 airports
• Air India, IndiGo oppose rapid liberalisation, citing unfair competition risks.
• Adani plans $11.1B airport investment, warns limited rights harm passengers

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Adani Group is lobbying the central government to expand international flying rights, arguing that greater access is essential to drive traffic at the eight airports it operates, where it is investing billions of dollars in new terminals, runways and passenger facilities.

The push, as per a report by the Economic Times, puts the infrastructure major at odds with India's two largest airlines-Tata Group-owned Air India and IndiGo-which have urged New Delhi to move cautiously on opening up air traffic rights to foreign carriers. Air India has warned that a rapid liberalisation could expose Indian airlines to what it terms "unfair competition" from well-capitalised West Asian carriers.

Adani Airports Holdings has asked the government to initiate negotiations with countries including the UAE, Saudi Arabia, Qatar, Singapore, Indonesia and Malaysia to expand bilateral flying entitlements, the ET report added. The group, which began commercial operations at the Navi Mumbai airport on Christmas Day, told the government last month that higher capacity would help Mumbai emerge as a global aviation hub, documents reviewed by The Economic Times show.

The conglomerate plans to invest $11.1 billion by 2030 in airport infrastructure such as terminals, runways, aircraft-handling facilities and passenger amenities, Jeet Adani, director at Adani Airport Holdings, has said.

An Adani Group official cautioned that restricting capacity would amount to "a criminal waste of assets" and hurt passengers through higher fares due to limited flight options. The official added that turning Indian airports into global hubs requires broader access and passenger choice, and should not hinge solely on when domestic airlines feel ready to compete.

Neither Adani Group nor the airlines responded to queries from The Economic Times.

International flying rights are governed by reciprocal bilateral agreements. Since coming to power in 2014, successive Narendra Modi-led governments have adopted a conservative approach to expanding rights for foreign airlines, particularly those from West Asia. The stated objective has been to shield Indian carriers and develop domestic transit hubs akin to Dubai or Singapore's Changi Airport.

Under the National Civil Aviation Policy of 2016, India set a rule that additional rights for foreign airlines would be considered only after Indian carriers had utilised at least 80% of their existing entitlements.

As a result, foreign airlines have been unable to add capacity despite surging demand, contributing to higher airfares. Seats on routes such as Dubai, for example, were last increased in 2014. While both Indian airlines and Gulf carriers like Emirates and flydubai have fully used their allocated rights, the government has not approved further expansion.

New Delhi's hesitation stems from concerns that passengers could increasingly shift to Gulf airlines, which have large fleets of wide-body aircraft and can funnel Indian travellers to Europe and North America through hubs such as Dubai, Abu Dhabi and Doha.

Air India CEO Campbell Wilson recently said at a public forum that in some cases more than 70% of passengers carried by foreign airlines from India are transit travellers. He argued that liberalisation should proceed at a pace that does not undermine investments being made by Indian airlines.

However, this cautious approach also risks underutilising new airport infrastructure, especially as Air India and IndiGo do not currently have aggressive international expansion plans to absorb the additional capacity being created at major Indian airports, The Economic Times reported.