Lower the flight risk of these two flyers

IndiGo and Air India are set to post grim numbers this year as safety, operational and macro conditions turned adverse. Mass flight cancellations gouged out IndiGo's profits in the December quarter, and the June crash of an Air India Dreamliner will push back the airline's profitability timelines. Depreciation of the rupee and closure of Pakistan's airspace are bumping up operating costs for the two airlines, which makes it difficult to take on entrenched West Asian carriers for rising international traffic from India. Foreign airlines are piling on pressure to increase capacity on international routes as IndiGo and Air India await deliveries against their big aircraft orders. Regulators have taken a hard line after the winter flight disruptions by capping fares and seeking accountability.

Calls for more competition in Indian skies are getting louder. But the airline industry is particularly susceptible to business cycles that tend to dampen enthusiasm for running them. Several decades of open sky policy has left only one private carrier standing among a heap of grounded airlines. GoI, on its part, had a tough time finding a buyer for Air India. The Tatas merged a clutch of airlines with Air India to give themselves elbow room for a turnaround. The pandemic caused a meltdown in the global airline industry and recovery has been nursed by governments. Expecting a third strong player in Indian aviation at this juncture would be a triumph of hope over reality.

The way forward for the world's fastest-growing aviation industry is that it backs local players with muscle to take on international competition. More players are likely to step up as the market grows. Some degree of market concentration is unavoidable to recover from decades of underinvestment in Indian aviation. IndiGo and Air India happen to be India's best available bet for an airline industry that can take the fight to foreign rivals. They need to take lessons from 2025 and get their act together.