A reckoning for India’s aviation sector

The past year was marked by sustained turbulence in India’s civil aviation sector, with multiple failures, whose scale and frequency paint a grim picture for the duopoly (IndiGo and the Air India group), both now bracing for thumping losses, with profits plunging drastically, according to recent numbers. The year witnessed a series of breakdowns from the June 2025 Ahmedabad crash to mass cancellations and prolonged flight delays generating unrest, not only among stranded passengers, but across the aviation market at large.

The December IndiGo disruption emerged as the first failed stress test, the scale of which now threatens to weigh heavily on the country’s largest carrier, with it being ranked in the bottom layer of most indexes. What appeared to be an airline-specific failure has now revealed itself as a system-wide constraint coming into view. And as the system attempts to correct itself after this exposure, the emergence of new regional players receiving No Objection Certificates (NOCs) demands regulatory caution: without targeted structural correction, these entrants risk merely redistributing fragility rather than absorbing shocks or easing the sector’s mounting operational strain.

India’s commercial aviation sector stands as the world’s third-largest domestic market, operating over 840 aircraft and carrying more than 350 million passengers annually. Yet this scale has been achieved through an expansion that is increasingly overstretched. As airlines prepare for the upcoming peak travel season amid tighter duty-time enforcement and fleet expansion, the December disruption now reads less as an aberration and more as a warning — making it imperative to evaluate what needs correction.

India’s pilot bottleneck

The December disruption brought into sharp view the mechanics of vulnerability within India’s aviation system. IndiGo entered Phase-2 of the implementation of the Flight Duty Time Limitation (FDTL) norms with 5,038 pilots operating a fleet of more than 360 aircraft, translating into a pilot-to-aircraft ratio of roughly 14, well below the global benchmark of 18–20 considered necessary for fatigue-mitigated operations. This mismatch exposed the limits of an operating model calibrated for sustained high utilisation.

The new FDTL framework, which reduced permissible night operations, extended mandatory rest periods, and tightened cumulative flight-hour ceilings, rendered IndiGo’s published schedules legally untenable without adjustment. Even with the flight time capped at 60 hours over a seven-day period, substantially higher than the 40-hour weekly standard widely regarded as healthy across sectors, the rules proved incompatible with existing crew strength.

While India’s aviation expansion has intensified demands for pilots, training capacity has failed to keep pace. Parliamentary disclosures estimate a requirement of 7,000 pilots between 2024 and 2026, rising to 25,000-30,000 over the next decade. In contrast, the Directorate General of Civil Aviation (DGCA) issued only over 5,700 Commercial Pilot Licences (CPL) between 2020 and 2024, a figure further diluted by attrition and type-rating constraints.

Industry norms indicate that 15-16 pilots are required per narrow-body aircraft, yet trainer shortages, simulator constraints, regulatory bottlenecks, and high training costs have rendered pilot supply relatively inelastic. Airlines have increasingly relied on foreign aircrew, with around236 temporary approval licences issued in 2025. However, these remain a limited and expensive stopgap.

Regulatory capacity has further compounded the strain. Nearly half of the DGCA’s sanctioned technical positions remain vacant even as fleet size and passenger volumes expand. Recent disruptions have been managed through schedule exemptions rather than strict enforcement, reflecting a shift towards ad hoc crisis management and underscoring deeper fragilities in India’s aviation oversight framework

India’s aviation duopoly

The degree of concentration in India’s domestic aviation market materially alters both the nature of competition and the system’s operational resilience. DGCA data for 2024-25 show that IndiGo commands approximately 63% to 65% of domestic passenger traffic, while the Air India group accounts for a further 27% to 28%, together forming a duopoly controlling nearly 90% of the market. At this level of concentration, IndiGo ceases to function merely as a competing airline and instead assumes the role of a systemically significant carrier, whose operational decisions have direct implications for national connectivity, fare stability, and service continuity.

Empirical evidence from cancellation episodes indicate that disruptions of dominant airlines lead to a contraction in aggregate capacity rather than a redistribution of passengers to competing carriers. Data show that IndiGo operates as the sole carrier on about 60.4% of all routes. Therefore, operational stress at IndiGo does not merely displace traffic across the network; it results in the outright loss of connectivity on a large share of domestic sectors, with few or no viable alternatives for passengers.

New regional players

In December 2025, the Ministry of Civil Aviation issued NOCs for the operational launch of three regional airlines — Shankh Air, Al Hind Air, and FlyExpress — all aimed at enhancing regional connectivity and serving previously unattended routes. Al Hind Air will operate regional connections from Kochi, Shankh Air will begin services from the upcoming Noida International Airport linking regions in Uttar Pradesh, and FlyExpress will function as a low-cost passenger and cargo carrier in Telangana.

These new entrants offer a ray of hope for de-concentration and improved regional connectivity, particularly under the UDAN scheme, which had operationalised 625 routes and 85 airports by 2025, including 102 new routes in the Northeast, targeting 1.5 crore commuters in the first phase itself. Yet, Tier-2 and Tier-3 cities still rely on only one or two airlines with limited frequency, and any disruption in IndiGo’s operations could lead to route cancellations, rendering air transport inaccessible for a sizable portion of the population.

The vulnerability of past regional airlines underscores that challenges in India’s aviation sector remain significant. The market has witnessed the failures of several carriers, including Paramount Airways (2010), Kingfisher Airlines (2012), Jet Airways (2019), TruJet (2022), and Go First (2023), while Vistara failed in 2024 and was subsequently acquired by Air India. These failures were driven by intense cost competition, weak demand in smaller markets, poor management, and infrastructural limitations at regional airports. A persistent structural challenge was the volatility of Aviation Turbine Fuel (ATF) prices, which are closely tied to the U.S. dollar, exposing airlines to global market fluctuations.

For emerging players to survive and meaningfully contribute to market de-concentration, active policy support beyond initial NOCs will be essential.

This includes the effective implementation of UDAN subsidies, preferential slot allocation at congested airports, coordinated development of Tier-2 and Tier-3 airport infrastructure, and potentially fuel hedging mechanisms or tax relief on ATF to offset price volatility.

The need for a systemic solution

The rising frequency of safety incidents indicate that India’s aviation system is operating beyond its safe design limits. By late 2025, the DGCA had issued 19 safety violation notices citing breaches of FDTL norms, lapses in quality assurance, unauthorised cockpit access, and aircraft operated with expired emergency equipment.

Globally, airlines maintain 20-25% spare crew capacity to absorb shocks; Indian carriers operate at near-total utilisation, allowing minor disruptions to cascade across networks. In this context, crisis management cannot substitute for structural reform.

With India accounting for 4.2% of global air traffic, and domestic demand set to rise sharply by reaching 715 million by 2030, failure to address these constraints risks converting India’s aviation growth into a recurring crisis borne ultimately by passengers.

Deepanshu Mohan is professor and dean, O.P. Jindal Global University and is a Visiting Professor and Research Fellow at LSE and University of Oxford. With contributions from Anvita, Saksham Raj, Srisoniya, and Suryakanth from Centre for New Economics Studies.