Review
of Cross-Ownership Norms Between Airports and Airlines
Prelims:
Indian Economy
Mains:
GS Paper III- Indian Economy, Infrastructure
Current relevance:
The civil aviation ministry is considering to lift restrictions
on airport ownership, which when implemented allows Airport owing companies
to also own/buy stakes in an airline company.
Highlights:
1. Current
Rules restrict airline ownership in airports and vice versa (Airport operators
from owning airlines).
2. In
India, Cross-ownership restrictions between airport operators and airlines are
primarily governed by project-specific Concession Agreements, Operation,
Management and Development Agreements (OMDAs), and privatization
frameworks rather than a single standalone statutory act.
3. These
rules cap cross-stakes at 10% to 26% to prevent conflicts of interest in
slot allocation and pricing.
Example:
i.
Concessional agreements for Noida and Navi
mumbai International Airport caps equity to 26%.
ii.
Under Privitaization framework for delhi and
mumbai airports aggregate equity was capped to 10%, and no permissions for
foreign airlines.
4. The
Ministry of Civil Aviation is currently preparing a concept note for
consultations with NITI Aayog and other government ministries on the proposed
changes.
Source: THE HINDU - https://www.thehindu.com/news/national/centre-weighs-easing-cross-ownership-rules-between-airlines-and-airports/article71254520.ece