According to an Economic Times report, Adani Airports Holdings Ltd., which runs eight airports throughout India, has pushed the Union government to increase international flying rights under bilateral agreements with nations like the United Arab Emirates, Saudi Arabia, Qatar, Singapore, Indonesia, and Malaysia.
Opposition from Indian Airlines
However, according to the article, this goes against the advice of two of India’s largest airlines, Air India and IndiGo. According to Air India, opening India’s skies to foreign airlines might expose it to “unfair competition” from wealthy carriers in West Asia.
The Adani Group informed the government last month that expanding capacity would enable Mumbai, Maharashtra, which is regarded as India’s financial center, to become a global aviation hub, according to papers the ET article cited. According to the newspaper, Jeet Adani, director of Adani Airport Holdings, has said that the Adani Group intends to invest $11.1 billion on terminals, runways, aircraft handling facilities, and passenger amenities by 2030.
Rationale for Increasing Flying Rights
According to the story, an unidentified Adani Group executive said, “Increasing access and alternatives for passengers is a critical facet of developing Indian airports into global hubs, and that should not simply rely on when Indian airlines are ready to compete.”
According to the official, airports would be creating a “criminal waste of assets” if they did not provide international flying privileges. The official also said that it would be equivalent to “penalising” Indian consumers, who would have to pay more since there would be fewer flights, according to ET.
Regulatory Restrictions on Foreign Carriers
According to India’s National Civil Aviation Policy of 2016, foreign carriers will not be awarded new flying rights until the utilization from the Indian side exceeds 80%. According to the research, despite an exponential increase in traffic, foreign carriers have been unable to operate more flights, which has resulted in an increase in the cost of aircraft tickets.
It also said that India’s “reluctance” to grant further international flying rights “is owing to the anticipated danger of customer migration to cash-rich Gulf airlines,” which can fly passengers to Europe and North America via their home bases in Dubai, Abu Dhabi, or Doha and have significantly larger aircraft inventories.
Concerns from Air India
The CEO of Air India, Campbell Wilson, was also cited in the study as stating that over 70% of the traffic carried by several foreign airlines from India was transiting and heading someplace else. Therefore, he had reportedly said that it was in India’s interests to make sure the speed of liberalization is such that it does not undermine investments being made by Indian firms.
Impact on Private Airport Operators
The report emphasized that private airport operators like the Adani Group suffer from India’s unwillingness to grant flying rights to foreign carriers because there are no “aggressive” expansion plans for Indian carriers like Air India or IndiGo, which results in lower returns for their large investments in constructing new terminals and runways in the airports they run.
