Indias Civil Aviation sector from 2000-25: IndiGos rise to Tatas takeover of AI

Kolkata: As the century, and in fact the millennium, completes its first 25 years, one of the sectors that has flown into sharp focus of the people as well as policymakers of the country is civil aviation. For never has a market leader in India's infrastructure sector let down the people of the country so badly and for such a prolonged duration. Close to 6 lakh passengers were stranded when the a single airline, which ventured to operate with almost no redundancies, did not have enough pilots to fly their aircraft.

In the first few days of December, the wings of IndiGo, which commands a 60% market share of the domestic airlines industry, were clipped, with over 5,000 flights cancelled in the first 10 days of the month. The most significant point is that it was not due to any external causes but due to inadequate number of pilots who could not sit at the cockpit while Indigo adhered to the mandatory resting needs. As the queues lengthened all across the country's airports, tempers frayed and the country's policymakers suddenly scampered to address a situation which had no readymade solutions. The extent of the airlines fiasco has led experts to say that what India sustained is the fallout of a single service provider controlling about two-thirds of a fast-growing sector. After 25 years into this century one can take back at how th journey of the Indian civial aviation sector shaped up in this century.

Standing at the end of the first quarter of a century, it is worthwhile to look back and compare how the civil aviation sector looked at the turn of the century. At the first glance, the stricture of the sector is starkly different from what is it was when the third millennium began.

A number of airlines spread their wings in the Indian skies in the nineties. In 1995 India’s six private airlines accounted for more than 10% of the domestic traffic. These were Jet Airways, Air Sahara, Modiluft Airlines, Damania Airways, NEPC Airlines and East West Airlines. In 2003, Air Deccan spread its wings and a year later GoAir began operations. In December 2004, the government permitted scheduled carriers with a minimum of five years of continuous operations and a minimum fleet size of 20 aircraft to begin international destinations. In 2005, Vijay Mallya launched the high-profile Kingfisher Airlines.

One of the biggest landmark events was the downfall of Kingfisher Airlines. DGCA suspended the flying license of Kingfisher on October 20, 2012. The reasons: financial instability and operational failures and Vijay Mallya's company was ensnared in huge debt and unpaid salaries. It sunk under the weight of rising fuel costs, overspending, and debt, leading to its eventual permanent grounding.

The future giant was born on August 4, 2006, when Indigo, set up by Rahul Bhatia and Rakesh Gangwal, began its first flight from Delhi to Imphal via Guwahati. The company was set up in 2005.

The Tata Group completed its takeover of the national carrier Air India on January 27, 2022, which was the most publicized event in the Indian aviation sector in the last quarter of a century. The airline returned to the Tatas after government control for about 69 years.

But as the civil aviation market stands today, IndiGo has about 65% market share and Air India 27%, thus making the Indian civil aviation market a duopoly. AkasaAir and SpiceJet have a much smaller pie. To set things right, the aviation panel has summoned airline managements today to review post-IndiGo disruption. DGCA has already grilled the top executives of Indigo. GoFirst shut shop recently and SpiceJet is not exactly in the ink of health.

It is time for the policymakers to set things right. For, the Indian civil aviation market is in the cusp of a much-discussed fast growth. The Indian domestic aviation market is the third-largest. The market is projected to rise from $15 billion in 2025 to $25 billion by 2030. ICRA stated that the domestic passenger market could reach 17 crore by FY25. Another interesting fact is that 15% of the pilots are women, which is far higher than the global average.befunk

To keep up with the growth in this sector, Air India placed an order for 570 aircraft from Airbus and Boeing. In the first tranche in June 2023, an order was placed for 470 aircraft. Later another 100 were added to the order list. Air India had said that its orders are designed to fuel the country’s growth in the domestic and international sectors.

IndiGo's orders are equally impressive, In fact, Indigo has emerged as the biggest buyer of Airbus aircraft in the world. It ordered a record 500 A320s ordered in 2023, and then some more. The aim is a delivery of 600 aircraft by 2030 to boost both domestic and global reach. While the expansion plans by both the dominant airlines companies is commendable, there is need for urgent initiatives by the regulator and policymakers that the country gets out of the dangerous stranglehold of the duopoly.

India is a nation on the move. GDP growth rates are high and the country is the fastest growing major economy in the world and it is supposed to continue on this trajectory for the next several years. Income levels are rising and it is taking more and more passengers to the sky. Therefore, it is time that they are assured of efficient, world-class service that won't witness any meltdown that they are suffering right now.

From setting up greenfield airports to UDAN, the Center has taken some steps to turn India's civil aviation skies into an efficient ecosystem. It is also important that the aviation industry functions efficiently for the economy to grow fast. More airlines will also help in generating a lot of employment, which is one of the of the areas of any government.

Feb 18, 1911: First commercial flight from Allahabad to Naini. Humber biplane flown by French pilot Monseigneur Piguet carrying 6,500 mails

1915: First Indian airline, Tata Sons, begins regular airmail service between Karachi and Madras

1924: Construction of civil airports begin -- Dum Dum in Calcutta, Bamrauli in Allahabad and Gilbert Hill in Bombay

1932: Tata Airlines takes wings

1933-1934: Indian Trans Continental Airways, Madras Air Taxi Services, Indian National Airways begin operations

1945: Deccan Airways set up. Jointly owned by the Tatas and Nizam of Hyderabad and Tatas

1947: Tata Airlines, Indian National Airways, Air Service of India, Deccan Airways, Ambica Airways, Bharat Airways and Mistry Airways used to operate at the time of Independence. Orient Airways moved to Pakistan

1948: Air India inaugurates weekly flight between Bombay and London via Cairo and Geneva.

March 1953: Parliament passes Air Corporations Act, 1953 and Indian Airlines and Air India International were set up after nationalisation of the entire airline industry. Eight airlines merged.

1972: International Airports Authority of India (IAAI) was constituted

1981: Vayudoot Airlines begin operations

September 20, 1991: Sahara Airlines begins operations

May 1993: Jet Airways begins operations

March 1, 1994: Jet Airways, Air Sahara, Modiluft Airlines, Damania Airways, NEPC Airlines and East West Airlines commenced domestic operations