Delhi airport operator sues government over defence airbase flights

The operator is suing the government for allowing commercial flights from a nearby defence aerodrome, flagging financial risks

The operator of the Indian capital's international airport, majority owned by GMR Airports, is suing the government for allowing commercial flights from a nearby defence aerodrome, flagging financial risks, legal papers showed.

The airport in Delhi is one of India's busiest, with about 73.6 million passengers last year, although it made a loss of $21 million because of higher government fees. As more and more Indians fly, airports are a lucrative business for the likes of GMR and billionaire Gautam Adani who also operates in the sector.

The Delhi airport will become "economically and financially unviable", after the government permitted commercial flights from the airbase, DIAL said in the March 10 lawsuit.

In the lawsuit, which Reuters was the first to report, DIAL told the Delhi High Court that the government had breached aviation rules barring a new airport within an aerial distance of 150 km (90 miles) of an existing one, unless there was passenger demand.

The Hindon Airport operates over 120 flights weekly, India's Solicitor General Tushar Mehta told the court on Monday as the judge asked the government to file written responses to DIAL's plea.

India's civil aviation ministry did not respond to e-mails seeking comment.

Shares of GMR Airports fell as much as 0.7% after the case was reported.

The state-run Airports Authority of India (AAI), which operates the Hindon facility in Ghaziabad, also has a stake and three board seats in DIAL.

DIAL said AAI had a conflict of interest as it was privy to confidential information on DIAL's business practices and strategies.

DIAL wants the court to overturn the government's decision, citing media reports for its contention that flights by Air India Express began operating in March from the Hindon Airforce Station, about 30 km (19 miles) from the Delhi airport.

From 2017, Hindon operated as a temporary extension of the Delhi airport for flights under the Indian government's regional connectivity scheme while the capital's airport expanded.

DIAL is represented by Trilegal, a law firm based in India.