IndiGo disruptions exposed monopoly, government scrambles to approve new airlines

New Delhi: Following disruptions caused by IndiGo operations that highlighted duopoly risks in India’s aviation market, the Union Civil Aviation Ministry has cleared No Objection Certificates (NOCs) for two new airlines — Al Hind Air and FlyExpress. Together with Shankh Air, these entrants aim to widen competition and strengthen resilience in the domestic aviation sector.

Government clears NOCs for three new airlines

Union Minister of Civil Aviation Ram Mohan Naidu said the ministry engaged with teams from three aspiring carriers over the past week. Shankh Air had already received its NOC previously, while Al Hind Air and FlyExpress obtained theirs this week. The approvals allow these airlines to formally begin setting up operations, although commercial flights will require an Air Operator Certificate (AOC) from the Directorate General of Civil Aviation (DGCA).

Duopoly risks exposed by IndiGo crisis

The recent IndiGo operational disruptions, which caused widespread flight delays and cancellations, underlined the vulnerability of a market dominated by two large players — IndiGo and the Air India Group — together accounting for nearly 90% of domestic passenger traffic. Analysts warned that over-reliance on a single airline can lead to system-wide disruptions, prompting the government to encourage new entrants.

Policy support and regional connectivity

Naidu emphasised that encouraging new airline entrants remains a priority, particularly as India is one of the fastest-growing aviation markets globally. Schemes like UDAN have already demonstrated the viability of smaller carriers, enabling airlines such as Star Air, IndiaOne Air, and Fly91 to expand air links to underserved cities and reduce pressure on major trunk routes.

Challenges for new entrants

While the NOC is a crucial first step, the next challenge is obtaining an AOC, which requires demonstrating financial strength, acquiring aircraft, hiring trained crew, and completing regulatory proving flights. Industry experts caution that not all airlines granted NOCs succeed in commencing operations, given high fuel costs, intense competition, and thin margins.

Outlook for India’s aviation market

Al Hind Air, backed by the Kerala-based Alhind Group, and FlyExpress, along with Shankh Air, are expected to take to the skies in 2026. Their entry signals the government’s intention to mitigate duopoly risk, expand capacity, and improve competitiveness in the domestic aviation market. At present, India has nine scheduled domestic airlines, including Air India, Air India Express, IndiGo, Akasa Air, SpiceJet, Star Air, Fly91, IndiaOne Air, and state-run Alliance Air.