GMR Airports-led DIAL challenges government’s move, citing financial and regulatory concerns
The operator of Delhi’s Indira Gandhi International Airport (IGI), primarily owned by GMR Airports, has filed a lawsuit against the Indian government over its decision to permit commercial flights from the nearby Hindon Airbase. Delhi International Airport Limited (DIAL) argues that this move could result in significant financial losses and operational challenges.
Financial and Operational Impact
Handling around 73.6 million passengers last year, Delhi’s IGI Airport remains one of the busiest in India. Despite its high passenger volume, the airport reported a $21 million loss last year due to increased government charges. The recent decision to allow commercial flights from Hindon Airport, located just 30 kilometers away in Ghaziabad, has raised fresh concerns over revenue losses and competitive pressure.
In a petition filed on March 10 with the Delhi High Court, DIAL stated that the decision to allow flights from Hindon threatens to make IGI Airport’s operations “economically and financially unviable.” The company warned that diverting passenger traffic to Hindon could erode its market share and profitability.
Regulatory Conflict and Legal Standpoint
According to aviation regulations, no new airport can be established within 150 kilometers of an existing one unless there is sufficient demand to justify additional capacity. DIAL claims that the government’s approval for commercial flights from Hindon violates these regulations.
Solicitor General Tushar Mehta, representing the government, informed the court that Hindon Airport currently handles over 120 flights per week. The Delhi High Court has asked the government to submit a detailed response to DIAL’s petition.
Conflict of Interest Allegations
DIAL has also raised concerns over a conflict of interest involving the Airports Authority of India (AAI). AAI, which operates Hindon Airport, holds a stake in DIAL and occupies three board seats. The airport operator argues that this gives AAI access to confidential business information, creating an uneven playing field.
Market Impact and Next Steps
Following the news of the lawsuit, shares of GMR Airports declined by 0.7%. DIAL is seeking a court order to reverse the government’s decision, pointing out that Air India Express began operating flights from Hindon in March. The outcome of this legal battle could have significant implications for India’s aviation sector and future airport expansion plans.
