Recent airport chaos sparks competition in India's aviation sector

The recent airport chaos across India has sparked calls to foster adequate competition in the domestic aviation sector. One way could be to look at what other countries are doing

Signs of a crisis were clearly discernible in November, just after norms requiring more rest hours for pilots came into effect from the 1st of the month. In that month alone, IndiGo Airlines cancelled over 950 flights.

 

However, on December 1, when IndiGo executives met top officials of the Directorate General of Civil Aviation (DGCA) to get some clarification on the new norms, they gave no indication that India’s largest airline was in a serious mess, said people aware of the development. Nor did the company put together a plan of action to inform customers of the possibility of mass cancellation of flights — in order to prevent airport chaos.

 

Just two days later, the airline that has a stranglehold in the Indian skies with a 65 per cent market share brought the country’s domestic aviation network aground. With over 5,500 IndiGo flights cancelled across airports in the first few days of December, impacting over 600,000 passengers till date, this is India’s worst aviation crisis.

 

Blame game

 

Predictably, a blame game followed. 

 

Aviation minister Ram Mohan Naidu, defending the regulator DGCA, blamed the meltdown squarely on the airline for gross mismanagement, directed it to give full return for cancelled flights, and warned that no one will be spared if a four-member committee set up by the ministry to investigate the matter held the management responsible.

 

But some aviation experts said it was this crisis that forced the government to relax the Flight Duty Time Relaxation or FDTL norms until February 10, a move they feared could jeopardise passenger safety once again. 

 

IndiGo said sorry through large ads and a campaign on customer care while its chairman Vikram Singh Mehta declared: “The disruptions of last week did not happen because of any deliberate action. They happened because of a combination of internal and unanticipated external events including minor technical glitches, scheduled changes linked to the start of the winter season, adverse weather conditions, increased congestion in the aviation system, and implementation of/and operation under the updated Crew Rostering rules.”

 

Jitendra Bhargava, a former director in Air India and an aviation expert, said, “IndiGo has quickly recovered in the last few days and bounced back to operate near-normal services. However, there was clearly someone who thought that the rules could be fixed and FTDL postponed. We will know who it was after the investigations are over.”        

 

Ambitious plans

 

Clearly, the crisis had been in the making for a while and did not come about suddenly. IndiGo had charted out an ambitious expansion of flights in the winter schedule — it got permission to increase its domestic departures by around 9.6 per cent over last winter and 6 per cent over the summer, hitting over 15,014 weekly departures or over 60,000 a month.

 

This increase was allowed by the DGCA on the grounds that it had more aircraft available in the winter — around 403 compared with 351 in the summer schedule.

 

By contrast, rival Air India group (including Air India Express) trimmed its flights by seat-capacity, based on Cirium data, by over 4 per cent of the previous winter schedule, which took into consideration the new pilot norms as well as the number of planes that had been sent for upgrading. Akasa Air and SpiceJet have added just 0.6 million seats for this winter.

 

Yet despite permission for an increase in departures, IndiGo was able to operate only 334 aircraft in October (the winter schedule kicks in in the last week of October) and only 344 in November with the FTDL norms. It was pretty clear now that IndiGo did not have enough pilots to fly all its aircraft and scheduled flights with enough rest time. It was snowballing into a major meltdown in the skies. 

 

Aviation minister Naidu blames the pilot shortage on the carrier saying in an interview that IndiGo had put a freeze on pilot recruitment for the last six months. Worse, based on a Lok Sabha submission in early December, the number of pilots at the airline fell by 7 per cent from 5,463 in March to 5,085 in December this year even as the airline looked at substantial growth in domestic flights. Full implementation of the new FDTL norms which require more rest for pilots and new caps on night flights means fewer pilots in the cockpit.

 

Flight path forward

 

The airline in a presentation to the DGCA has now shared plans to hire 900 pilots through 2026. This would be the most it has hired in a year, and many are sceptical it can pull it off, not least because it would also increase its wage bill considerably. 

 

Estimates of the number of pilots it needs to hire immediately after February 10 — after which airlines have to follow the new resting rules — range from 65 to 200. One way out would be to get foreign commanders to fill the gap. Aviation analyst Ameya Joshi said, “Pilot recruitment takes time, but upgrading pilots in the airline who are eligible to command should likely start soon, helping ease the crisis to some extent.”  

 

The problem is that IndiGo’s big strength of running a very lean organisation at low costs is now coming to bite back. For instance, going by Statista and industry estimates, its ratio of pilots to an operating aircraft at 14 is the lowest for an airline of this size. Global airlines peg it mostly at 18-21 pilots per aircraft (Ryan Air, China Southern, Lufthansa etc ), while Air India is at 26 and Akasa at 15.

 

What does all of this mean for passengers, particularly in this peak season of travel? The aviation ministry has directed IndiGo to cut 10 per cent of its winter schedule initially but the DGCA has asked for a 5 per cent trim for the same period.

 

That translates to around 107 IndiGo flights a day or 3,210 a month. But the final number would depend

 

on how soon the airline is able to get back to normalcy.

 

Can rival airlines fill the gap? “Yes to an extent these airlines might,” said Joshi, “but IndiGo is too large and other airlines do not have spare capacity due to supply chain issues delaying the induction of new planes.”  For instance SpiceJet and Akasa Air are expected to add in 20-30 new planes but only across the whole year. 

 

Air India CEO Campbell Wilson has pointed out that while the airline will be inducting 20 narrow-body aircraft in 2026, the fleet size will continue to be flat because it is returning, retiring and retrofitting planes. 

 

Promoting competition

 

This raises a more fundamental question — has the government veered the aviation sector towards a near- monopoly or duopoly in the domestic market? If so, what are the implications for India’s open skies policy?

 

Globally, most countries allow far greater competition in the skies —  in the US the largest player American Airlines has only a 21 per cent share; in China the top 3 account for 58 per cent; in Thailand, Thai Air Asia commands 37-41 per cent; and in the UK EasyJet holds 45-50 per cent share of the domestic market.

 

IndiGo’s control is not only in the overall market share — according to Cirum data, one-fifth of IndiGo seats in the winter schedule are on routes where it has a monopoly, where no other competition flies. Similarly in as many as 20 direct routes it has no competitor. These include Coimbatore-Chennai, Ahmedabad-Hyderabad, Hyderabad-Indore, and Kolkata- Patna.

 

With the heat on, the Competition Commission of India has reportedly undertaken a suo motto review internally on whether IndiGo violates competition norms.

 

Queries to IndiGo did not elicit a response. 

 

Naidu has acknowledged the challenge that a monopoly or duopoly can bring to the skies, saying he wants to see five players — each with at least 100 planes — on domestic routes. But the question is: How will he tame the seventh largest airline in the world with a fleet of over 400 aircraft?  Surely it will expand its pilot strength to continue its sway in the market.

 

Global experience shows that you can keep a check on the big boys by capping or freezing their slots, reserving future slots for new players, and reallocating routes through administrative measures. 

 

Or how about borrowing a leaf from Australia? There, the government has directed the Australian Competition and Consumer Commission to monitor fares, yields, service quality, costs and anti-competitive practices in the aviation sector for a minimum of three years — till 2026. The aim is to rein in Qantas Airways and Virgin Atlantic, which together control more than 90 per cent of the domestic skies — akin to IndiGo-Air India-combine. The Commission has the power to penalise airlines. 

 

In India, the government has its work cut out — either to continue with a monopoly or duopoly, or to look afresh at its open skies policy. 

The crisis

 

• Flight cancellations: IndiGo cancelled over 950 flights in November after FDTL rules took effect from November 1
• Fleet utilisation: Operated 344 of 403 aircraft, despite DGCA clearance for winter expansion, due to pilot shortage
• Passenger impact: Since November 3, airlines cancelled nearly 5,500 flights, affecting over 600,000 passengers

 

Government action

 

• Accountability: Aviation minister backed DGCA, blamed IndiGo, ordered a four-member probe
• Regulatory relief: FDTL deadline extended to February 10
• Consumer protection: IndiGo directed to issue full refunds for cancellations
• Capacity cut: DGCA ordered an initial 5% reduction in winter flights
• Staffing plan: IndiGo submitted a pilot hiring plan through 2026