Now Reading: Finance ministry flags aviation oligopoly, seeks corrective action
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Finance ministry flags aviation oligopoly, seeks corrective action
The finance ministry has raised concerns over the 'oligopolistic nature' of India's aviation sector at an inter-ministerial meeting, questioning steps taken to prevent a handful of players from cornering airport contracts. The…
The finance ministry has raised concerns over the 'oligopolistic nature' of India's aviation sector at an inter-ministerial meeting, questioning steps taken to prevent a handful of players from cornering airport contracts. The ministry's representative asked the civil aviation ministry what measures would ensure competition and minimise risks of concentration and over-leveraging, as the government prepares to award contracts for 11 airports.
The civil aviation ministry outlined an action plan, including a cap on the number of airports awarded to a single bidder, though the level of the cap is yet to be finalised. However, the article argues that deeper regulatory flaws have allowed three players, state-owned AAI, Adani Airport Holdings, and GMR Airports, to dominate, handling over half of India's air passengers collectively.
A 2019 amendment to the Airports Economic Regulatory Authority of India Act reduced the regulator's scope from 33 airports to just 16, removing several recently privatised airports from its oversight. This has weakened independent regulation, the article contends, even as the government defends the change as necessary due to rising passenger traffic.
Indian Opinion Analysis
The finance ministry's intervention signals rare intra-government pushback on consolidation, but the real leverage lies with the Public Private Partnership Appraisal Committee, which must approve the 11 airport contracts. The 2019 amendment to the AERAI Act, which halved the number of regulated airports, remains the structural fault line: it exempted the Adani Group's six newly won airports from tariff oversight. The cap on bids, if set below three airports per bidder, could break the pattern of single-group sweeps seen in 2019. The PPPAC's final norms, expected in weeks, will determine whether the ministry's concerns translate into enforceable rules or remain a note on file.
Source: theprint.in
This brief was synthesised by AI from the source linked above.
