Adani Eyes Airline Launch in Bold Aviation Bet; Here's Why It Could Change the Industry

The Adani Group is evaluating plans to launch a new airline, a move that could reshape India's aviation landscape, currently dominated by IndiGo and Air India, Reuters reported citing two sources familiar with the matter.

While no final decision has been taken, the conglomerate is exploring multiple options, including starting a new carrier or acquiring a stake in an existing airline, the report said.

The deliberations mark a notable shift for the ports-to-cement group, which has previously maintained that it had no plans to enter the airline business despite being India's largest private airport operator.

Government Push Amid Industry Challenges

According to one source, the group's assessment follows informal discussions in which the government encouraged large business houses, including Adani, to consider entering the aviation sector.

The move comes as regulators continue to scrutinise Air India following last year's fatal Dreamliner crash, while market leader IndiGo has faced operational disruptions, including large-scale flight cancellations caused by a pilot shortage in December.

Policymakers believe greater competition could strengthen the sector and reduce dependence on the current duopoly.

The source added that while aviation remains a difficult business with thin margins, Adani is considering the proposal in the broader national interest.

A High-Risk Industry

India is one of the world's fastest-growing aviation markets, but it has also witnessed several high-profile airline failures. Kingfisher Airlines, Jet Airways and Go First have all ceased operations over the past 15 years, highlighting the industry's challenges, including high operating costs, intense competition and supply chain constraints.

At present, IndiGo controls about 65.4% of the domestic market, while Air India holds roughly 25%, raising concerns over limited competition.

Airport Expansion Continues

Despite its cautious stance on airlines, the Adani Group has significantly expanded its aviation infrastructure business. It operates eight airports across India, including Mumbai, and is pursuing an $11-billion airport expansion strategy.

The company also plans to invest more than $2 billion in airport-linked commercial developments, including hotels, retail centres and office spaces.

Notably, Jeet Adani, director at Adani Airports, told Reuters in December that the group was not interested in operating an airline, citing low margins and stating that its core strength lay in developing and managing long-term infrastructure assets.

Separately, the group has reportedly approached the government to relax rules restricting certain airport operators from owning stakes in scheduled airlines, a move that could pave the way for a future aviation venture if approved.