IndiGo chaos unmasks fragility of India's civil aviation sector

Disruption underlines risks of having one dominant carrier and weakness of nation's regulatory oversight

- Nirmala Ganapathy India Bureau Chief

An IndiGo worker tagging stranded bags and belongings at Indira Gandhi International Airport in New Delhi on Dec 8 following large-scale flight disruptions. The crisis that has engulfed the airline - and led to over 580,000 passengers being stranded - was caused by its failing to adapt to new crew rostering rules.

(PHOTO: REUTERS)

In a matter of days, the reputation of India's biggest airline was in tatters.

IndiGo's decision to abruptly cancel thousands of flights in early December triggered chaos in the world's third-largest aviation market, and laid bare weaknesses that threaten the sector's growth and showed the vulnerability of passengers.

The crisis that has engulfed the airline, and led to more than 580,000 passengers being stranded, was caused by its failing to adapt to new crew rostering rules, which require longer rest periods for pilots.

When those rules kicked in, the airline found itself short of staff and had to cancel flights.

The disruption also underlined the dangers of having one dominant carrier in the market and the weakness of the country's regulatory oversight.

IndiGo has a 65 per cent market share and Air India 27 per cent in what is effectively a duopoly, with others such as SpiceJet having a much smaller presence.

India's Civil Aviation Minister K. Ram Mohan Naidu has even suggested that the country should have at least five carriers with a fleet of around 100 aircraft each.

Analysts agree that the sector needs more competition to prevent a repeat of the chaos that unfolded in early December.

"The (aviation) sector will have to restructure," said Mr Sanjay Lazar, chief executive of Avialaz Consultants. "There has to be more competition."

He said airlines should be more closely scrutinised and operate under tighter rules; "otherwise, we have failed our passengers and the aviation market".