Government issues NOCs to two new airlines amid IndiGo disruption

Following recent disruption caused by IndiGo’s schedule collapse and renewed concerns over a duopoly in Indian aviation, the civil aviation ministry has stepped up efforts to increase competition by issuing no objection certificates to new airline operators.

Union civil aviation minister Ram Mohan Naidu stated on social media platform X on Tuesday that the ministry has granted NOCs to two proposed airlines this week, as part of a broader push to encourage new entrants in one of the world’s fastest-growing aviation markets. He informed that Shankh Air had already received its NOC earlier, while Al Hind Air and FlyExpress were granted approvals during the past week. The minister added that he had met teams from Shankh Air, Al Hind Air and FlyExpress over the last week as they seek to begin operations in Indian skies.

Naidu stated that the ministry’s endeavour has been to promote more airlines in India, citing the role of government policies in driving aviation growth. He further said that schemes such as UDAN have enabled smaller carriers including Star Air, India One Air and Fly91 to play an important role in strengthening regional connectivity, while noting that significant scope for further growth remains.

The development comes amid industry calls for the government to examine structural issues that have contributed to India having among the highest operating costs for airlines globally. Industry executives have pointed to high aviation turbine fuel prices and taxes as key challenges, according to a report by The Economic Times.

An industry veteran said that within the Indian aviation ecosystem, most stakeholders other than airlines are profitable, which has resulted in repeated airline failures over the past three decades, as per the report. The person added that while launching a new airline is possible, sustaining operations remains difficult due to high cost structures, taxation, limited management bandwidth and thin funding.

A senior airline official stated that although airline failures are a global phenomenon, the cost-hostile operating environment in India adds to the challenge. The official said that flying is no longer a luxury and that keeping air travel accessible to the common citizen makes cost and tax rationalisation necessary, according to the report.