INDIGO'S MELTDOWN IS A STRUCTURAL WARNING

Airlines are private firms. But aviation mobility is a public network good. India's economic geography rests disproportionately on one carrier's operational discipline. When that carrier stumbles, the effects ripple across GDP, not just holiday plans.

- ADITYA SINHA

Passengers wait with their luggage as many IndiGo flight services stand cancelled at Lokpriya Gopinath Bordoloi International Airport, in Guhawati on Saturday. ANI

India's aviation collapse this week did not begin with a software glitch or an unexpected change to crew-rostering norms. It began years earlier, when a market with too few players allowed its largest airline to optimise for cost, market share, and punctuality metrics, while hollowing out the buffers that make a complex network resilient. What is unfolding today is an oligopolistic failure, textbook and predictable.

IndiGo cancelled nearly 600 flights in three days, and over 1,300 across November-December. It is the culmination of a structural equilibrium in which the largest airline behaves as if passengers cannot go anywhere else, competitors cannot catch up, and regulators will always blink. When an airline commands more than half the domestic market, its internal misjudgements become macro-level disruptions. Unfettered dominance breeds fragility, not strength.

In concentrated markets, firms often face muted incentives to invest in resilience. Oligopolists optimise for cost minimisation even when it increases systemic vulnerability, because the downside is diffused across consumers and regulators rather than borne privately. High entry barriers allow incumbents to under-invest in quality and redundancy without losing market share. The IndiGo crisis validates all three insights.