Indian Watchdog Is Concerned With IndiGo and Air India Controlling 81.3% Of The Market

In a recent report, India has seen a dramatic shift in its domestic aviation market landscape. IndiGo and Air India now have a nearly combined 81.3% domestic market share, with IndiGo ferrying 56.2% of the country’s passengers and Air India flying 25.1%. This reveals a stark change from Air India’s 17.3% market share back in 2014.

Part of the change is due to a January 2022 purchase of Air India by the Tata conglomerate, operators of the Vistara and AirAsia India airlines. The merger application between Air India with Vistara and AirAsia India is still pending with the Competition Commission of India.

The demand for air travel in India is expected to surge, reaching 685 million people by 2042. It is estimated that Indian carriers account for nearly 7% of the industry backlog of orders.

“India does look to move towards just two main players in the aviation space in future. While there remains a fear of a duopoly, the Air India group will take a while to consolidate,” says Amey Joshi, an independent aviation analyst.

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Other recent occurrences, such as financial difficulties leading Kingfisher Airlines and Jet Airways to cease operations, Go First filing for voluntary insolvency, and SpiceJet’s market share decreasing to 4.4% have contributed to the hike in market share. The entrance of Akasa Air to the market in August of last year, claiming a market share of 4.8%, has also provided greater competition.

The United States and Brazil are also examples of countries with multiple airlines operating their domestic aviation markets. American Airlines, Delta Airlines, Southwest Airlines, and United Airlines take up approximately 67% of the domestic market in the United States, while LATAM Brasil, Gol Intelligent Airlines S.A., and Azul are the major airlines in Brazil.

India’s domestic market will remain an interesting space to watch as it is expected to have just two major players in the aviation space. With Air India and the other partners in the Tata conglomerate well positioned to take advantage of a more consolidated market, IndiGo still remains a formidable rival.

Source: Reuters