India clears new airlines to break aviation duopoly after IndiGo crisis exposes market risks

The move comes in the wake of recent operational disruptions at IndiGo, which reignited concerns over the risks of an overly concentrated market.

New airlines get regulatory green light

The Union Ministry of Civil Aviation has granted no objection certificates (NOCs) to two new airline applicants — Al Hind Air and FlyExpress — paving the way for their entry into India’s domestic aviation market.

A third carrier, Uttar Pradesh-based Shankh Air, which already holds an NOC, is expected to commence operations in 2026.

Civil Aviation Minister K Rammohan Naidu confirmed the approvals in a post on X, stating that the ministry recently held meetings with teams from Shankh Air, Al Hind Air and FlyExpress.

While Shankh Air had secured clearance earlier, Al Hind Air and FlyExpress received their approvals this week.

Govt signals push for wider participation

The approvals underscore the government’s renewed intent to expand participation in one of the world’s fastest-growing aviation markets.

India currently has only nine scheduled domestic airlines in operation, a number that shrank further in October after regional carrier Fly Big suspended scheduled services.

Al Hind Air is being promoted by the Kerala-based alhind Group, while FlyExpress joins a growing list of aspiring airlines attempting to enter a market where pricing power and scale remain heavily concentrated.

Duopoly concerns intensify after IndiGo disruptions

The push for new airlines has gained urgency amid mounting concern over India’s aviation duopoly.

IndiGo and the Air India Group — comprising Air India and Air India Express — together command more than 90 per cent of the domestic market.

IndiGo alone controls over 65 percent.

These worries sharpened earlier this month when operational disruptions at IndiGo triggered widespread delays and cancellations, exposing the systemic risks of heavy reliance on a single dominant carrier in a rapidly expanding aviation ecosystem.

Role of UDAN and regional connectivity

Minister Naidu reiterated that encouraging more airlines has been a consistent policy objective, especially given the pace of growth in domestic air travel.

He highlighted the role of the government’s UDAN scheme, which focuses on boosting regional connectivity and has helped smaller carriers establish a presence.

Under UDAN, airlines such as Star Air, IndiaOne Air and Fly91 have expanded operations on underserved routes, linking smaller cities to the national aviation network.

The ministry believes there is still significant untapped potential in this segment.

Current landscape and lessons from past failures

According to the Directorate General of Civil Aviation, India’s scheduled carriers currently include IndiGo, Air India, Air India Express, Alliance Air, Akasa Air, SpiceJet, Star Air, Fly91 and IndiaOne Air.

However, the sector’s history also serves as a cautionary tale.

In recent years, airlines such as Jet Airways and Go First shut down after succumbing to mounting debt and operational pressures, highlighting the volatility and high-risk nature of the aviation business.

As new players prepare for takeoff, the success of India’s strategy to break the aviation duopoly will depend on whether fresh entrants can survive in a fiercely competitive and capital-intensive market.