India’s aviation sector has travelled a long distance—from a crowded field of carriers to a near duopoly. IndiGo and the Air India group together account for about 90% of domestic passenger traffic. Against this backdrop, the Competition Commission of India opening an antitrust probe into IndiGo, after finding prima facie evidence of abuse of dominance, has implications that extend beyond a single case.
The immediate trigger was the cancellation of thousands of flights in December 2025, which regulators believe may have created artificial scarcity and restricted consumer access. But the concern is structural. When two firms control most capacity, the issue is not merely pricing power. It is systemic vulnerability. Disruptions at a single airline—staffing gaps, aircraft groundings, or scheduling failures—can quickly translate into higher fares and reduced connectivity nationwide.
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IndiGo alone carries roughly 60–65% of domestic passengers. The remaining share largely sits with the Air India group. Other airlines together account for barely a tenth. In such a market, competition does not discipline behaviour; it barely survives.
How India’s aviation sector narrowed
The concentration did not occur overnight. The collapse of Jet Airways, the prolonged distress of SpiceJet, and the consolidation of the Tata group’s airline businesses steadily narrowed the field. Aviation is capital-intensive. Scale determines access to aircraft leasing, airport slots, and network connectivity. Over time, scale produces cost advantages; cost advantages produce market share; market share reinforces scale. Competition, by contrast, is self-eliminating.
What is often missed is that scale now also governs aircraft supply. Early, large orders secure better delivery positions with manufacturers such as Airbus and stronger terms from lessors. Smaller carriers face delivery delays and higher leasing costs, constraining fleet growth even when demand exists. Recent technical shocks—most visibly engine inspections linked to Pratt & Whitney—have compounded this asymmetry. Airlines with thin balance sheets and limited spare capacity absorb groundings far less easily than dominant incumbents.
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Limits of post-crisis regulation
The CCI probe is warranted. But competition cannot be restored through investigations after crises. Structural reform must run through sector regulation as well.
Capacity approvals, safety oversight, and operational resilience sit with the Directorate General of Civil Aviation. Airport tariffs and charges are shaped by the Airports Economic Regulatory Authority. Policy direction rests with the Ministry of Civil Aviation. When these levers move without coordination with competition policy, market outcomes tilt by default towards incumbents.
This matters because regulation affects who can add capacity, how quickly grounded aircraft return to service, and what costs airlines bear at congested hubs. Antitrust scrutiny that is not aligned with sector regulation risks treating symptoms while leaving the structure intact.
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Slot policy and supply discipline
Airport slot allocation remains central. At congested airports, slot concentration mirrors market concentration. Dominant airlines retain frequency advantages that smaller carriers cannot match. Periodic slot reallocation, anchored in transparent criteria, would matter more if aligned with aircraft availability and regulatory approvals—so that access to commercially viable timings is not nullified by delayed deliveries or prolonged groundings.
India’s passenger demand is projected to grow sharply over the next decade. A concentrated market may deliver short-term efficiency. Over time, it weakens price discipline, innovation, and network resilience. International experience suggests durable aviation ecosystems combine full-service carriers, low-cost airlines, and regional operators—supported by neutral regulation and predictable aircraft supply.
India’s policy challenge is not to dismantle scale, but to prevent it from becoming exclusionary. Without attention to aircraft supply dynamics and regulatory coordination, competition policy will lag market reality. In aviation, competition is not ideology. It is insurance.