Aviation duopoly and DGCA lapses: IndiGo crisis exposes deep flaws in India's skies

IndiGo’s crisis spills into the skies with passengers bearing the brunt as last-minute fares on ultra short routes such as Delhi to Bareilly touched fifty thousand rupees in recent days. The sudden surge, experts say, is not a coincidence but the inevitable result of a sector dependent on a duopoly and stretched operational capacity.

India currently relies overwhelmingly on IndiGo and Air India for domestic connectivity. When the largest player, with close to 60 percent market share, hits turbulence, the system falters.

Dynamic pricing pushes fares to extreme levels

With IndiGo grounding flights because of crew shortages and rostering issues, available seats fell sharply. Booking algorithms immediately pushed remaining inventory into the highest pricing slabs across metros as well as regional airports.

“Dynamic pricing works in well balanced markets. In a duopoly, it becomes a burden for passengers,” said Dr Vandana Singh, Chairperson of Aviation Cargo, Federation of Aviation Industry in India (FAII). “Bareilly at fifty thousand is not just a price point, it is a signal that our aviation supply elasticity is too low.”

“Pricing in airlines is always driven by algorithms linked to route sensitivity, seat availability, and the absence of competition,” said brand strategist Suhel Seth, who has previously served on the British Airways Global Advisory Board.

“What is unusual has been the behavior and the absolute nonchalance with which IndiGo has treated its passengers.” Seth argues that this crisis is a market failure made worse by poor leadership and accountability rather than just operational problems.

Regulatory lapse or negligence

Aviation lawyer Yeshwant Shenoy says the problems at IndiGo were building up for years. “IndiGo is suffering because they used to do many number of sectors illegally by pushing pilots to do duties which is against the laws. When the law is implemented, IndiGo cannot survive,” he said. “If a pilot is running beyond duty hours because of this extension, who takes responsibility if something goes wrong. DGCA or IndiGo” he asked, adding that “there is no value to life in India” when airlines can bend rules at will.

A demand spike with nowhere to go

Cities like Patna, Ranchi and Bareilly saw prices soar because they operate thin schedules even under normal conditions. Seasonal pressure from wedding travel and holiday rush pushed fares higher at the worst possible moment.

“Airfare spikes are a symptom of deeper structural weaknesses. India must build competitive resilience in its aviation sector instead of relying on only two major carriers,” Dr Singh said. “Regional connectivity cannot remain vulnerable to operational disruptions. When a single airline hiccups, an entire network should not choke.”

Air India and smaller carriers such as SpiceJet and Akasa have absorbed some displaced passengers. Analysts say this is only a temporary revenue boost and not a sign of deeper competitive edge.

Should IndiGo face stronger punishment

Seth says accountability cannot stop at advisories or public statements. “The Government of India has done a remarkable job by withdrawing the regulations up until February 10 because the government is responsible to citizens. IndiGo has come across as a blackmailer which does not care for its passengers. And this blackmail to the government, to my mind, is unpardonable and must be censured,” he said.

He also argues for compensation that covers connecting flights, not just the cancelled sector.

“Passengers must be compensated in what I would term 360 degree compensation. At least the base fare must be compensated.”

Benevolence or business

Asked whether other airlines should avoid fare hikes while passengers are stranded, Shenoy was direct.

“Business is not about benevolence. Business is about profits.”

What India needs to prevent the next shock

Experts point to several long term fixes:

1. Reduce duopoly dependence

Encourage more carriers and fleet growth so that disruption in one airline does not cripple the network.

2. Improve regional capacity

Thin routes must have more flights and alternatives to avoid extreme price shocks.

3. Enforce safety and duty norms

DGCA must strengthen oversight instead of easing restrictions during crises.

4. Better communication and accountability

Airlines must inform passengers clearly and take responsibility for failures.

“Seasonal demand combined with reduced fleet availability was always going to lead to fare escalation. The solution is not to stop pricing algorithms, but to deepen competition and operational buffers,” Dr Singh said. “Air India’s temporary gain should not distract from the structural fragility that created the surge.”

The airfare surge is not only about high prices. It exposes a deeper fragility in India’s aviation network. When capacity is concentrated and operational slack is low, a single carrier’s crisis quickly becomes a nationwide consumer shock.

Unless competition widens and regional depth improves, India will continue to see days where a one hour domestic flight costs more than a trip abroad.