With 2 airlines in command, market concentration in aviation skyrockets

Sector's HHI up over 1800 points in a decade to a record 4500 in FY25

- KRISHNA KANT

Market concentration has climbed steadily across major sectors in India over the past decade, but aviation stands out with the highest level of dominance, as measured by the Herfindahl-Hirschman Index (HHI). The aviation sector's HHI surged to 4,500 in FY25, more than double the threshold for a "highly concentrated" market under standards used by the antitrust division of the US Justice Department and the European Commission.

The sector has seen the sharpest increase among eight key industries reviewed by Business Standard, with its HHI jumping more than 1,800 points from 2,678 in FY15.

The aviation sector now outstrips even telecom on concentration. Telecom saw its own sharp rise in HHI after Reliance Industries' entry in 2017, with the sector's score climbing about 1,500 points over the decade, from 1,670, considered "moderately concentrated", to 3,174 in the "highly concentrated" band in FY25.