Any move by the government to allow airport operators to own airlines will create a “massive conflict of interest” and will be against the interest of consumers, Rahul Bhatia, managing director of the country’s largest airline IndiGo said Thursday. Bhatia’s comments in IndiGo’s post-earnings investor call came amid reports that the initial discussions on allowing airport operators to own airlines have begun in the aviation ministry, and the Adani group — which operates eight airports — could venture into the airline business.“We are reading the news as you are. All I can say is that, if the news has any merit, one, it has no global precedent…and typically (it will create) a massive conflict of interest. Over a period of time, it would actually be against the interest of consumers,” Bhatia said in the company’s post-earnings call on Thursday, adding that IndiGo will closely watch the developments on this front.In a departure from its stance to steer clear of having an airline while building a significant presence in India’s aviation ecosystem, the Adani Group is considering having a carrier within its fold, although the plans are not concrete yet, according to sources in the know. Preliminary discussions on easing restrictions on cross-ownership in both airline and airport businesses have begun at the Ministry of Civil Aviation (MoCA) after the Adani group requested for an enabling policy environment, it is learnt. If the restrictions are eased, they would also pave the way for airlines to pick up stakes in airports.On whether IndiGo would consider investing in airports if the curbs are eased, Bhatia said that question is moot at present, and a considered view can only be taken once there is clarity on the matter.Also Read | Adani considers foray into airline business, Centre mulls allowing airport operators to run airlinesAccording to some industry insiders and experts, if airport operators are allowed to own airlines, there is bound to be resistance from existing airlines and other stakeholders due to potential conflict-of-interest situations arising from an airport operator owning an airline. These could include preferential treatment and slot allocation to the airline run by the airport operator. Any such move by the government will have to be accompanied by stringent regulatory oversight as well as mandating the airline and airport operations to be run independently, experts said.The government has been calling for more airlines in the Indian skies, given the duopoly of IndiGo and the Air India group, which have a cumulative domestic market share of 90%. IndiGo alone has a domestic market share of over 65%. The objective of the initial discussions to allow airport operators to also run airlines is to foster more competition in the sector, sources said.According to prevailing rules, operators of Delhi and Mumbai airports are barred from holding more than 10% stake in a scheduled carrier, and the Adani group is seeking this particular condition to be removed. The Adani group has 74% stake in the Mumbai airport, while GMR has 74% in the Delhi airport. Apart from being an airport operator, the Adani group has a major presence in other segments of the aviation sector as well, including ground handling, maintenance, repair and overhaul (MRO), and pilot training. The conglomerate also plans to set up an aircraft manufacturing facility in India in partnership with Brazil’s Embraer.Story continues below this adThe conglomerate had so far maintained that it was not interested in running an airline as it didn’t fit the group’s capital discipline and philosophy, which was about investing in assets in high-margin businesses and sweating those assets. The airline business is the opposite of that. But the thought process has evidently changed over the past few months, largely due to two factors — the government’s push for more airlines in a bid to increase competition and check market concentration, and Adani’s own venture to set up a final assembly line (FAL) of Embraer’s passenger jets.Sukalp Sharma is a Deputy Associate Editor with The Indian Express and writes on a host of subjects and sectors, notably energy and aviation. He has over 16 years of experience in journalism with a body of work spanning areas like politics, development, equity markets, corporates, trade, and economic policy. He considers himself an above-average photographer, which goes well with his love for travel. ... Read More Tags:Indigo