India's One-Airline State (indiadispatch.com) 8
An anonymous reader shares an analysis: In most major aviation markets, including the U.S. and Europe, competition is an oligopolistic affair, with several large airlines competing for market share. India's domestic sector, however, is increasingly characterized by the ascent of a single airline.
Low-cost carrier IndiGo has achieved an extraordinary concentration of the market, capturing approximately 64.4% of all passenger traffic as of May. More strikingly, the airline operates with a near-monopoly on 66% of its domestic routes, facing little to no direct competition in a significant portion of its network.
This position is the culmination of a decade-long expansion that saw the exit of rivals like Jet Airways and GoAir. Today, its remaining competitors continue to struggle; SpiceJet's domestic market share has fallen to just 2% while it operates a reduced fleet of only 19 aircraft. Air India, despite its acquisition by the Tata Group in 2022, has been slow in its restructuring and continues to cede domestic ground, with the flag carrier remaining unprofitable.
Low-cost carrier IndiGo has achieved an extraordinary concentration of the market, capturing approximately 64.4% of all passenger traffic as of May. More strikingly, the airline operates with a near-monopoly on 66% of its domestic routes, facing little to no direct competition in a significant portion of its network.
This position is the culmination of a decade-long expansion that saw the exit of rivals like Jet Airways and GoAir. Today, its remaining competitors continue to struggle; SpiceJet's domestic market share has fallen to just 2% while it operates a reduced fleet of only 19 aircraft. Air India, despite its acquisition by the Tata Group in 2022, has been slow in its restructuring and continues to cede domestic ground, with the flag carrier remaining unprofitable.
"despite its acquisition by the Tata Group" (Score:4, Informative)
Re: (Score:3)
Not quite. They may be screwing Landrover but the TATA group absolutely dominates all other areas they touch domestically in India which makes the Air India ownership and lack of dominance of the local routes there a bit of an enigma.
We had an interesting situation recently where I had to travel from Pune to Bengaluru with colleagues. Their corporate travel agent had an India profile, mine an EU profile so IndiGo didn't come up as an option since internationally the profiles favour the flag carriers. Their
SpiceJet is terrible (Score:2)
I lived in India for several years, and SpiceJet is the worst airline in the world.
I took them for two short-haul flights in India and never again! SpiceJet makes Spirit Airlines look like Emirates Air in comparison!
I only flew two times on SpiceJet, but both flights were delayed more than 30 minutes.
They have a 2.4/10 rating.
https://youtu.be/gxS47cJsT78 [youtu.be]
Re: (Score:2)
I would argue that Jet Airways was worse. They had to turn a flight around because the pilots forgot to turn on the cabin pressurization, injuring 30 passengers. This was about 9 months after the incident where the pilots got into a mid-flight fight, one left the cockpit, and when they didn't come back right away, the second pilot went looking for them. Thankfully, the cockpit door didn't lock them out.
My SpiceJet flight was bad, but I'll take tiny, cramped, rude and late over no one flying the plane.
Routes, profit and monopolies. (Score:5, Interesting)
Low-cost carrier IndiGo has achieved an extraordinary concentration of the market, capturing approximately 64.4% of all passenger traffic as of May. More strikingly, the airline operates with a near-monopoly on 66% of its domestic routes, facing little to no direct competition in a significant portion of its network.
Budget airlines tend to take routes that full service carriers ignore because they're not profitable, however budget airlines tend to make most of their money off of routes that are highly competitive. Ryanair might service Glasgow Prestwick or Norwich to popular destinations like Alicante (Spain), but these are routes going from nowhere to somewhere... the big earners are going to be routes from somewhere to somewhere like London (Gatwick or Luton) to Alicante. Not only will the later routes be full (load factor in excess of 98%) which is what budget airlines rely on for profitability, the demand means you can charge higher prices.
So I suspect that IndiGo is largely the same, they'll fly almost everywhere but a lot of those routes will be subsidised by the popular routes.
As for monopolies... This is what happens when you have a government that is in the pocket of billionaires. Airlines are a difficult and fickle business to run, you're at the mercy of the price change in almost anything and only a few big things (like fuel) can you hedge your bets on. In order to have a competitive marketplace for air travel you need robust regulation that is functional. Which is why European air travel is so competitive, despite being heavily regulated the regulations are there to enable business but curb it's most destructive excesses (which usually lead to monopolies). Australia on the other hand struggles to support 2 airlines because the QANTAS group has such a massive stranglehold which is largely supported by Government (both bloody governments) and drives up prices. Whenever a 3rd airline starts up, QANTAS can afford to drop their prices, undercut them until they go out of business and then jack prices up again, this was witnessed recently with REX (Regional Express) when they tried flying between capital cities.
Something Doesn't Add Up (Score:2)
the airline operates with a near-monopoly on 66% of its domestic routes, facing little to no direct competition in a significant portion of its network.
Maybe I'm just bad at math (and/or English), but to me, 44% doesn't translate as "little to no direct competition" ... it translates as "almost half".
Re: (Score:2)
Something Indeed Doesn't Add Up (Score:2)
Hint: 66% + 44% = 110%