India flies into airline turbulence of own making

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, controls some 65 percent 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 percent 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 percent market share. SpiceJet 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.