A significant rift has emerged in India's aviation sector, pitting major airport operators against the country's leading airlines. The Adani Group, which operates eight airports across India, is actively urging the central government to expand international flying rights with several nations. This push stands in direct opposition to the stance of Tata-owned Air India and IndiGo, who have cautioned against opening Indian skies too quickly, warning of potential damage to domestic carriers.
Adani's Vision for Global Hubs and $11.1 Billion Investment
According to documents reviewed by ET, Adani Airports Holdings has formally requested the government to accelerate negotiations with countries including the UAE, Saudi Arabia, Qatar, Singapore, Indonesia, and Malaysia. The objective is to allow overseas airlines to operate more flights to and from India. This strategy is designed to drive passenger traffic through Adani's airports, where the conglomerate is making substantial investments in new terminals, runways, and passenger amenities.
The group recently inaugurated the Navi Mumbai airport for commercial operations on Christmas. In its communication to the government, Adani argued that greater international capacity is essential for developing Mumbai into a global aviation hub. Jeet Adani, director at Adani Airport Holdings, has detailed plans for the group to invest a staggering $11.1 billion by 2030 in aviation infrastructure. An Adani Group official warned that not increasing flight access would lead to a "criminal waste of assets" and force Indian passengers to pay higher fares due to a scarcity of flights.
Airlines' Resistance and the Government's Guarded Stance
On the other side of the debate, Air India and IndiGo have expressed strong reservations. Air India has consistently maintained that expanded access for foreign carriers, particularly those based in West Asia, could subject Indian airlines to "unfair competition." The government, since 2014 under Prime Minister Narendra Modi, has adopted a cautious approach to expanding bilateral flying rights, especially with Gulf nations.
This policy is rooted in the desire to shield Indian carriers while encouraging domestic airports to evolve into major transit hubs. The National Civil Aviation Policy of 2016 established a key threshold: additional rights would be considered only after Indian airlines had utilised at least 80% of their existing entitlements. This stance has, however, led to a capacity crunch. For instance, seat capacity to Dubai was last increased in 2014, and despite both Indian and UAE carriers fully using their rights, no further expansion has been approved, contributing to higher airfares.
The Core Conflict: Hub Aspirations vs. Airline Growth
The government's hesitation stems from concerns that passengers could increasingly shift to Gulf airlines, which use large wide-bodied aircraft to route travellers to Europe and North America through hubs like Dubai, Abu Dhabi, and Doha. Air India CEO Campbell Wilson recently emphasised this point, noting that for some foreign carriers, over 70% of traffic from India is transit traffic. He argued that the pace of liberalisation must not undercut investments made by Indian entities.
This restrictive policy now creates a dilemma. It risks affecting airport operators like Adani, who are expanding capacity in anticipation of higher traffic, while India's largest airlines have yet to outline aggressive international growth plans that would fully utilise existing bilateral rights. The debate highlights a fundamental tension within India's aviation growth story: the race to build world-class airport infrastructure versus the need to nurture competitive Indian airlines to fill them.
