India flies into airline turbulence of own making

Spicejet

08/12/2025 12:00

The author is a Reuters Breakingviews columnist.  The opinions expressed are her own.  Refiles to add market capital of InterGlobe Aviation in paragraph one.

By Ujjaini  Dutta

BENGALURU, Dec 8 (Reuters Breakingviews) - The chaos at India's airports stems from more than just IndiGo. The number of flights the airline has been cancelling a day surpassed 1,000 on Friday after executives neglected to plan for tighter pilot rest rules that came into effect at the start of November. The root cause, though, is that the carrier, operated by $23 billion InterGlobe Aviation INGL.NS, controls some 65% of the skies. That’s a problem in any market, let alone one as large as India’s – and it comes from a failure to foster enough competition.

The company run by former KLM CEO Pieter Elbers dominates one of the world's fastest-growing aviation markets. It ferried 165 million domestic fliers this year, a number expected to nearly double by 2030, per government data. The country has over 150 airports and hosts the seventh-busiest route in the world between Mumbai and Delhi. IndiGo has built a reputation for running a tight ship with a low-cost model, boasting on-time performance. Its revenue grew 17% in the year to March and it’s the only profitable airline in the country.

All airlines had nearly two years’ notice of the new rules for pilots, which include more weekly rest and capping the number of night landings. Rivals rejigged rosters; IndiGo did not. Instead, it froze hiring, which it has now lifted. Its response has raised suspicions that it was less a planning lapse and more a wager it could force the regulator’s hand. So far, New Delhi’s response to the crisis has been to put a few measures on hold and grant IndiGo some two-month exemptions – as well as to cap industry air fares while the disruption continues.

None of that deals with IndiGo’s market dominance, which accelerated after Jet Airways’ collapse in 2019 and GoAir’s 2023 bankruptcy. Tata group’s Air India and Vistara merged last year, giving it a roughly 27% market share. SpiceJet SPJT.BO is struggling with debt and Akasa Air is new and small.

New Delhi’s key goal now ought to be fixing the system. Charging smaller airlines lower airport fees and fuel taxes and dealing with dollar-heavy leasing costs would help. As would speeding up the bankruptcy process, so that any carrier affected would be able to continue operating while restructuring. That would all aid flying through airline turbulence that is of India's own making

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CONTEXT NEWS

IndiGo CEO Pieter Elbers was granted a 24-hour extension by India's Directorate General of Civil Aviation on December 7 to submit its response to a show-cause notice issued over the recent large-scale flight disruptions.

The airline, India's largest, cancelled over 1000 flights on Friday, including all services from the capital New Delhi, after failing to plan for new pilot flying-time regulations, Reuters reported on December 6.

IndiGo has also been exempt from some new pilot rest rules, including capping the number of night landings, for two months, according to Reuters. After the exemptions were announced, the carrier said that it expected to return to normal operations between December 10-15.

India's domestic air passenger traffic is on the rise https://www.reuters.com/graphics/BRV-BRV/znvnqllwwpl/chart.png

IndiGo leads India's domestic skies https://www.reuters.com/graphics/BRV-BRV/zgvoyaaqmvd/chart.png

(Editing by Antony Currie; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/ujjaini.dutta@thomsonreuters.com))