Govt clears way for 3 new airlines as IndiGo crisis lingers

Government of India has fast-tracked the approval process for new airlines in the wake of the IndiGo fiasco, granting all regulatory clearances to three new operators - Shankh Air, Al Hind Air and FlyExpress.

The ministry of civil aviation has completed issuance of no objection certificates (NOCs) to all three airlines, with a view to provide more options for air travellers, in the light of the IndiGo crisis. 

The recent meltdown of IndiGo’s operations has brought to fore the risks of limited alternatives in a market where 90 per cent of the market is controlled by two carriers - IndiGo and the Air India group – with IndiGo holding over 65 per cent share.

India currently has nine scheduled domestic airlines in operation, after regional carrier Fly Big stopped scheduled operations in October. Domestic airlines in the current roster of the Directorate General of Civil Aviation (DGCA) includes IndiGo, Air India, Air India Express, Alliance Air (state-owned), Akasa Air, SpiceJet, Star Air, Fly91 and IndiaOne Air.

The falling number of domestic carriers has increased concern about the lack of depth in the sector, especially when passenger numbers continue to rise each year.

The market is largely dominated by IndiGo and the Air India Group, which includes Air India and Air India Express. Together, these airlines account for over 90% of domestic air travel. IndiGo alone holds more than 65% of the market.

Civil aviation minister Ram Mohan Naidu said on Tuesday said the ministry has engaged with representatives of the three emerging airlines before granting NOC, thus completing the process of regulatory clearances.

While UP-based Shankh Air has already received NOC from the aviation ministry, Kerala-based Al Hind Air and Hyderabad-based FlyExpress recevied NOC on Tuesday. All three are aspiring operators while FlyExpress is operating an air cargo business, without owning any aircraft. 

The minister said the government is encouraging more airlines as part of its effort to expand the air travel market. 

The new additions, however, are smaller ones without the necessary financial and material strength to cater to a wider section of air travellers. Most of these carriers are currently confined to serving the regional market under the UDAN (Ude Desh ka Aam Naagrik) scheme.

While the government keeps adding new entrants in the airline space, the number of failed operators is also increasing, which exposes the vulnerability of the Indian airline industry.