Clearing the air

Rules curbing airline stakes in airports should be reviewed

Plain logic suggests that placing a limit on an airline’s shareholding in an airport is valid from the point of view of competition law. But the 2006 agreement between the Airports Authority of India (AAI) and GMR Airports Ltd (GAL), capping an airline’s shareholding to 10 per cent in Delhi International Airport Ltd (DIAL), appears excessively restrictive, especially when it constrains the airport operator’s ability to attract funds for expanding and modernising the country’s busiest airport. 

This question has arisen over a Rs 8,000-crore investment by a consortium led by the Tata group in GAL, which demerged from GMR Infrastructure earlier