Industry Odisha Bureau, Jun 11: In a bid to avert India’s aviation sector turning into a ‘duopoly’ or ‘oligopoly’ as well as maintain quintessential competition, the Civil Aviation Ministry (CAM) of India has reportedly recommended imposing a cap during the third round of airport privatisation comprising eleven (11) airports in the country.
The CAM’s recommendation is reportedly “a fall-out of serious concerns raised by the government departments represented in the Public Private Partnership Appraisal Committee (PPPAC)”.
Thus, the CAM’s key proposal reportedly underlines: “A single bidder may be allowed to bag only two to three airport bundles, i.e. equivalent to about five to six airports, not more than that, so that duopoly or oligopoly could be prevented.”
Notably, “Duopoly is a market situation where only two companies dominate and control an industry, limiting competition”, while “Oligopoly is a market structure dominated by a few large firms that have significant control over prices and market decisions.”
As per media reports, “The eleven (11) Indian airports planned to be privatised have been grouped into five bundles.”
Pertinent to note here that, the Adani Group had reportedly bagged privatisation bid of six Indian airports in 2019 allegedly having “no prior airport operating experience.” Later on, it “acquired Mumbai and Navi Mumbai airports taking the number to eight”. All these privatised eight airports handle around “78 million passengers annually accounting for 25% of India’s air traffic.”
It has further been reported that, the NITI Aayog and the Department of Economic Affairs had recommended in 2019 for “limiting the number of airports being awarded to a single player as well as required prior operational experience”, but such a recommendation of both the important government agencies had allegedly been turned down.
