New Delhi, Sept. 23 -- The Centre is considering whether airport operators such as Adani Airport Holdings Ltd should be allowed to own airlines, civil aviation minister K. Ram Mohan Naidu said on Tuesday, as India seeks to expand its regional air connectivity, while addressing potential conflicts of interest in the aviation sector. "When an airport operator wants to operate an airline, we also have to examine the potential disadvantages. We need to create a system that addresses those concerns. There are several advantages, but the matter is under deliberation," Naidu said at a press conference to announce the launch of the revamped regional connectivity scheme, UDAN (Ude Desh Ka Aam Nagrik). The issue came to the fore after Adani Airport, a subsidiary of the Ahmedabad-based conglomerate Adani Enterprises Ltd, wrote to the Airports Authority of India (AAI) in June seeking relaxation of norms that could allow it to explore operating an airline. Adani Airports operates eight airports, including Mumbai, Navi Mumbai, Ahmedabad, Lucknow, Guwahati, Mangaluru, Thiruvananthapuram and Jaipur. Adani Enterprises chief financial officer Jugeshinder Singh later said the group was not interested in starting an airline, but could explore taking a non-controlling stake in a regional carrier to improve connectivity across its existing and future airports. Naidu said there is currently no general law preventing cross-holding between airport operators and airlines. Restrictions, however, exist under airport-specific agreements, including the Operations Management and Development Agreements (OMDAs) governing the Delhi and Mumbai airports. Under the existing arrangements, operators of the Delhi and Mumbai airports can hold up to 10% in an airline, he said. "For example, if BIAL or Bangalore International Airport Ltd, which is also a private operator, wants to operate an airline, there is no rule as such stopping it," Naidu said. For context, Fairfax owns a majority stake in BIAL, which manages the Bengaluru airport. The government is now examining whether a broader framework is needed to address potential conflicts while allowing greater integration between airports and airlines. "Pros and cons are being looked at. And no final decision has yet been taken," the minister added. India is expanding its airport network but faces a shortage of aircraft and airlines to connect smaller cities. Naidu has previously said the country needs at least five large airlines with 100 aircraft each, as well as more carriers to improve regional connectivity. India doesn't have that many large carriers. Barring IndiGo (Interglobe Aviation Ltd) with over 400 planes and the Air India group that has over 290, no other airline in the country has even 50 aircraft in its fleet. The third largest, Akasa Air, has 43 aircraft. However, the possibility of airport-airline cross-holding has drawn criticism from IndiGo. Its co-founder and managing director Rahul Bhatia had said allowing such ownership would be "without global precedent". Meanwhile, an expert said the regulatory mechanism needs to be very clear. "The regulatory mechanism needs to be drafted first and looked into," said Gurmukh Singh Bawa, secretary general of the Air Travellers Association....