Akasa Air, India’s youngest airline, says India should not close the door on airport operators investing in airlines, emphasizing that more capital and increased competition are precisely what the country’s aviation sector requires.
In an interview with Mint, CEO Vinay Dube said concerns over potential conflicts of interest could be addressed through strong regulation rather than outright restrictions.
"We're always eager to serve our country well and doing so means supporting more airlines, fostering increased competition and offering more choices to consumers,” Dube said.
The Economic Times reported last month that the Adani Group had written to the Airports Authority of India seeking a waiver of a clause that bars airport operators from holding more than a 10% stake in a scheduled airline.
The report fuelled speculation that the infrastructure conglomerate, which operates eight airports in India, was exploring an entry into commercial aviation. The reported proposal sharply divided the aviation industry.
IndiGo co-founder and managing director Rahul Bhatia opposed allowing airport operators to own airlines, warning that such a policy would create a “massive conflict of interest” and ultimately hurt consumers. In contrast, FLY91 managing director and chief executive officer Manoj Chacko, in an interview to Mint earlier, welcomed the possibility, provided it is accompanied by transparent governance and safeguards to ensure fair competition.
Addressing concerns that airport owners could favour their own airlines, Dube said the responsibility lies with regulators to establish and enforce appropriate safeguards.
“The government has rules in place. The government understands what the considerations are for a private airport operator… A mature regulator, they'll account for all of that,” he said. “That shouldn't take away from the fact that India as a country needs competition.”
Last month, Adani Group CFO Jugeshinder Singh sought to allay concerns, telling analysts after the earnings of flagship Adani Enterprises Ltd that the group's interest was “to support the development of an airline for regional connectivity.”
As Akasa Air completes four years of operations and market leader IndiGo marks its 20th anniversary, Dube said the airline's ambition is not to chase market share but to build a profitable, financially resilient business. The approach mirrors the philosophy often articulated by Bhatia that IndiGo was never about size but execution.
"We're focused on financial stability, profitability. We're focused on the consumer," Dube said on Wednesday at the carrier’s headquarters in Mumbai’s Lower Parel, rejecting the notion that an airline's success is determined by its market share.
While the airline currently holds about 6% of India's domestic market, Dube said it has never viewed market share as its primary objective.
Dube argued that several airlines globally have demonstrated that profitability is not necessarily linked to scale.
“Between 2010 and 2019, four out of the five most profitable carriers in the US had market shares of only 2-4%," he said. “It's not a market share game.”
IndiGo continues to dominate India's domestic aviation market with about two-thirds of the passenger traffic.