Ameya Joshi
Indian aviation has been growing even when the world was still reeling under the threat of COVID. The International Air Transport Association (IATA) had predicted that the world would recover to pre-COVID levels by 2024. Indian domestic aviation surpassed pre-pandemic levels in 2023, indicating that the industry is not only strong but also resilient. However, India’s aviation sector, the world’s fastest-growing market, faced unprecedented turbulence in 2025, marked by massive flight disruptions, financial haemorrhaging, safety crises, and structural bottlenecks. IndiGo’s dominance eroded under regulatory pressures, while Air India’s merger struggles and a fatal crash exacerbated vulnerabilities in a near-duopoly landscape. These events stranded millions, eroded passenger trust, and prompted government interventions amid soaring operational costs.
IndiGo’s Operational Meltdown
IndiGo, commanding 65% market share, triggered nationwide chaos in early December with over 1,000 daily cancellations, grounding tens of thousands. The crisis stemmed from inadequate planning for phase two of DGCA’s Flight Duty Time Limitations (FDTL) rules, effective November 1, which mandate longer pilot rest periods and restrict night landings. Airports such as Delhi and Mumbai experienced all domestic departures halted, with passengers sleeping on floors amid technical glitches, fog, and congestion. For an airline that has had a razor-sharp focus on everything, such a situation is a challenge unlike any in its nearly two-decade history in Indian skies, where it has seen many of its competitors vanish.
The government launched a high-level probe and imposed fare caps, exposing the risks of overreliance on a single carrier. IndiGo’s CEO apologized, citing misjudged crew shortages, while on-time performance declined to single digits, a sharp drop from 80% annual averages. This fiasco, compounded by regulatory and geopolitical disruptions across carriers, highlighted the fragility of rostering in high-demand skies. The operational meltdown affected lakhs of passengers and prevented a new high in domestic passenger traffic in the first half of December, when the industry had hoped to exceed 5.5 lakh passengers per day.
Safety Shocks
June’s Air India Flight 171 crash in Ahmedabad killed 241 of 242 aboard a Boeing 787-8, plunging into a medical college moments after takeoff. The tragedy, amid power-loss calls, intensified scrutiny, with risk reduction and oversight targeted. DGCA’s stricter FDTL and penalties underscored fatigue concerns, though implementation backfired.
This was one of the worst disasters in recent history and the first one for the Dreamliner. The subsequent handling of the investigation, the black box, and the initial reporting were widely questioned and did not appear to reflect a mature market’s approach to the case.
Sliding Rupee & Debt Burden
The depreciating rupee, relative to the US dollar, has been a challenge for airlines. While the extensive international network has been a valuable buffer for airlines such as Air India, the same is not true for IndiGo, which is seeking to increase its share of international customers within its total capacity.
Costs such as leasing are dollar-denominated, and with Indian carriers relying on the leasing model, leasing costs have increased due to the depreciating rupee. The sale of tickets in international markets partially offsets the costs. However, IndiGo reported substantial losses in Q2, with foreign exchange losses being the primary driver.
FDTL
While IndiGo’s operational meltdown resulted from the revised Flight Duty Time Regulations, the FDTL regulations were finally changed after years of discussion. Not only does this provide relief to the crew, but it also aligns the FDTL with global benchmarks, which makes India appear to be a maturing market.
With the third-largest domestic market, India is a leading force in aviation, with nearly 2000 aircraft on order across airlines.
New airlines failed to take off
After Akasa Air, many carriers secured NOC to start operations. However, reaching the Air Operating Certificate stage was a challenge for all. Jettwings Airways, which seeks to redefine air travel in Northeast India, obtained a so-called No Objection Certificate from the Ministry of Civil Aviation in June 2023. More than two years later, the airline has yet to acquire the promised Embraers in its fleet and start operations. Lucknow-based Shankh Air received an NOC in September 2024. An office is located at Lucknow Airport, but there are no facilities on the runway because the airline doesn’t hold an Air Operating Certificate. Shankh Air has made statements on the induction of both Boeing and Airbus aircraft; its website shows a Shankh Air-liveried Embraer. The Kerala-based Al Hind Airlines received its NOC in 2024 with plans to launch in 2025. Its aircraft of choice is the ATR 72-600, but that has yet to take flight either.
Ameya Joshi is an aviation analyst and columnist who runs the analysis website Network Thoughts.
