Pilots’ Body Warns New Regional Carriers Cannot Break Indian Aviation Duopoly

The Federation of Indian Pilots (FIP) has strongly disputed recent claims.

They argue that new regional carriers cannot break the entrenched Indian aviation duopoly.

FIP President Captain C.S. Randhawa called the idea a “dangerous illusion.”

His remarks follow the Civil Aviation Ministry granting No Objection Certificates (NOCs) to three proposed airlines.

These new regional carriers include Shankh Air, Al Hind Air, and Fly Express.

The approvals came after mass flight cancellations by market leader IndiGo renewed competition scrutiny.

The Duopoly Reality

The Indian domestic market is heavily consolidated.

IndiGo and the Tata-owned Air India Group dominate the sector.

Together, they control over 86% of the domestic skies.

IndiGo alone maintains a market share exceeding 60%.

This near-duopoly has exposed the sector's vulnerability.

Operational issues at one major carrier can cause widespread chaos.

Randhawa stated that small startups lack the resources to compete.

He noted that no regional airline in India has survived long-term.

Their average lifespan is often just three to seven years.

Challenges for New Entrants

FIP highlights that these new players lack both funding and operational expertise.

They face significant structural barriers India presents to startups.

Randhawa pointed to specific concerns about the new carriers.

Al Hind Air has reportedly closed its Kochi office and terminated staff.

Shank Air is still struggling to obtain its air operator’s certificate (AOC).

Securing aircraft leases remains a major hurdle for new players.

There is also an acute shortage of type-rated pilots in the country.

These issues significantly slow down fleet expansion and launch plans.

Policy Barriers and High Operating Costs

The FIP president emphasized that policy issues are the biggest threat.

Aviation turbine fuel (ATF) is a prime example of this problem.

ATF costs can account for about 40% of an airline’s operating expenses.

It remains heavily taxed outside the UDAN regional scheme.

High state-level Value Added Tax (VAT) is applied to ATF.

This creates a cascading tax effect, raising overall prices.

Randhawa urged the government to bring ATF under the Goods and Services Tax (GST).

This change would lower costs and provide a consistent tax rate.

However, the GST Council recently rejected this proposal.

High landing and parking charges at private airports also hurt small airlines.

These factors make regional airline survival nearly impossible.

Call for a Policy Reset

The FIP argues that only large, well-funded entities can challenge the duopoly.

They called for a policy reset to encourage major corporate houses to enter the market.

These large companies must commit adequate capital and a long-term vision.

• Key Policy Demands:
• Bring aviation turbine fuel under the national GST framework.
• Reduce taxes and charges at major airports.
• Actively encourage large corporate investment in the sector.

Simply clearing small new regional carriers creates a false sense of airline competition India.

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Policy changes are needed to ensure market stability and passenger choice.

The current structure leaves the fastest-growing aviation market vulnerable to shocks.

The International Air Transport Association (IATA) has long advocated for tax relief on jet fuel globally.