Robin Roy
On Friday, the Opposition alleged that the IndiGo “fiasco” was the cost of this government’s “monopoly model” and asserted that India deserved fair competition in every sector, not match-fixing monopolies.
Monopolies have always been a major hindrance and have always aborted a competitive scenario and have also limited consumers’ choice. When a single company controls a major slice of the market, it often leads to a lack of alternatives and also results in soaring prices… leave alone the limitations in quality service.
Monopoly also reminds us how in the early 2000s, software giant Microsoft was found guilty of (monopolistic) practices by the US Department of Justice.
It may be noted that monopolies and duopolies in the aviation sector exist in some nations like Canada and Australia too. However, in China there are three state-owned carriers and several private airline companies.
Despite government efforts, only a handful of carriers over the years have succeeded. High taxes, fierce competition and supply-chain glitches, have in the past, driven airline companies like Jet Airways, Kingfisher into bankruptcy.
About 174 million passengers travelled from and within India by air in 2024, 10% more than a year ago, according to the Air Transport Association data.
IndiGo, founded by Rahul Bhatia and Rakesh Gangwal in 2006, currently has a fleet of more than 400 aircraft and serves close to 380,000 customers a day through its more than 2,000 daily flights. The airline company has mostly Airbus A320s!
With $9 billion in revenues and $807 million in profits in the last fiscal, IndiGo strongly dominates the country’s aviation sector.
However, with customer refunds as of Sunday already touching $68 million, and set to rise the airline company is already facing the heat.
The carrier had an average on-time performance of 91.4% as recently as July – the best among Indian airlines at six major airports. However, on Friday, that figure plunged to just 3.7%.
Indigo’s recent crisis reminds us of the Southwest Airlines’ holiday season meltdown in 2022, which led to cancellation of close to 17,000 flights and stranded over 2 million
passengers.
The IndiGo mayhem has a lesson for one and all.
Isn’t it high time that we learn from the monopolistic problems? In the power distribution sector, the existence of a single discom player or may be in a duopoly system customers don’t have a fair choice to select players… in the scenario of a single discom player, it can also wield its “power wand” to fix rates leaving the consumers in a huff and a trip in the grid can result in a major outage too leaving lakhs of consumers in the dark age!
Telecom is another sector where any major player easily dictate the market thereby controlling a large share of it.
Monopoly in the domain of the ports can lead to controlling the ecosystem of trade. In such a scenario, does the exporters have enough room to negotiate?
Also, privatised airports in a monopolistic system dictate tariffs leaving airline companies and passengers with no choice.
The IndiGo crisis clearly showed that monopoly especially in essential services can lead to major vulnerability.
Also, in the IndiGo crisis, the regulator too realised that coming down hard on such a major player could easily grind the entire system.
Following the IndiGo crisis, New Delhi clearly needs a rejig in policy rethinking and have competition especially in consumer-oriented sectors. Only competition could have averted a crisis of this magnitude.
If we want to avoid further crises in customer or consumer-oriented sectors, the only mantra is to have more competition… The mantra is more the merrier.
If you enjoyed reading this article, you can help support our journalism by adding OHeraldo as a preferred source.
WHY PILOTS BLAME THE MANAGEMENT
Pilot unions allege IndiGo ignored warnings and failed to prepare staffing
rosters:
A prolonged hiring freeze despite knowing new rules were imminent
Lean manpower strategy for years to cut costs
Non-poaching pacts and pay freezes
Schedule planning that didn’t factor in new rest norms
The Federation of Indian Pilots said the chaos is a direct consequence of these choices, claiming other airlines prepared better and remained largely unaffected. Unions also criticised DGCA for approving winter flights without verifying pilot availability under the new norms.
TURBULENCE DECODED
As per DGCA data, IndiGo cancelled 1,232 flights in November, with 755 linked to crew shortages and new Flight Duty Time Limitation (FDTL) rules.
The revised FDTL norms, implemented in July and tightened further from November 1 by capping night landings have increased staffing needs and added to operational
challenges.
The airline’s punctuality also dropped sharply to 67.7 per cent in November from 84.1 per cent in October.
WHAT’s FDTL NORMS
The FDTL norms place a maximum limit on the number of hours a crew member including pilots and cabin staff can remain on duty. This reduces flying time to eight hours per day, 35 hours per week, 125 hours per month and 1,000 hours per year. The rules were implemented following a directive from the Delhi High Court.
DELAY PERCENTAGE
IndiGo’s on-time performance (OTP), meanwhile, plunged to 19.7 per cent. This means that four out of five IndiGo flights were delayed. By comparison, 65 per cent of IndiGo’s 2,200 flights were delayed on Tuesday and around 50 per cent of its flights were delayed on Monday.
In contrast, the airline’s punctuality was at 84.1 per cent in October and 67.7 per cent in November.
(Robin Roy is a Senior Journalist and former Senior Associate Editor,
O Heraldo, Goa)
