Commentary: IndiGo cancellations spotlight weaknesses in India aviation | USAEMALL.com

AIRLINE OLIGOPOLY

Does IndiGo’s fall from grace mean it is unhealthy for India to rely on one or two airlines? After all, IndiGo and Air India Group make up over 90 per cent of the market share.

Airline oligopolies are not exclusive to India. In Indonesia, Lion Air Group, owned by businessman Rusdi Kirana, accounts for about 70 per cent of the archipelago’s vast air network.

The aviation industry’s high barriers to entry make it difficult for more companies to compete for market share. This has the benefit of sifting out rogue airlines that are badly run and aren’t well capitalised.

A few Indian opposition politicians have taken advantage of the crisis to blame Prime Minister Narendra Modi’s government which, they allege, gives select companies a virtual monopoly.

Indian aviation minister K R Naidu rejected the monopoly accusation. He placed the blame singularly on IndiGo, reinforcing the government’s pro-competition posture.

IndiGo CEO Pieter Elber has apologised for the chaos, adding that operations have stabilised and the airline is now “back on its feet.”

More importantly for IndiGo and its parent company InterGlobe Aviation, investors have stayed faithful. Despite a brief sell-off of the company’s stock during the flight cancellations, its share price has rebounded and recouped much of its losses.

Airline shares account for a small fraction – under 1 per cent – of India’s total market capitalisation. That said, listed and unlisted aviation entities, valued at US$18 billion in 2025, are projected to grow between 3 and 5 per cent up to 2030.

Indeed, much of India’s claim as an emerging superpower is pinned on its growing economy and its army of brilliant engineers. Yet its airline industry faces structural weaknesses which must be addressed for it to be considered successful by global standards.

Shukor Yusof is the founder of Endau Analytics, an independent aviation advisory firm based in Singapore.