IndiGo: Air travel for the masses

Air Deccan was India’s first proper low-cost carrier, launched in 2003 by Captain G.R. Gopinath, a former army officer turned entrepreneur. His vision was genuinely radical: fares at or below the cost of a train ticket, making flying accessible to people who had never considered it. At its peak it was serving over 200 destinations and had brought millions of new passengers into aviation for the first time. But it was losing money at scale and could not raise capital fast enough. Kingfisher Airlines acquired it in 2007, briefly rebranded it as Kingfisher Red, and then shut it down entirely. The routes and slots were absorbed. The experiment ended.

Kingfisher is the most spectacular failure in Indian aviation history. Vijay Mallya, the flamboyant chairman of the United Breweries Group, built it as a premium carrier from the start: leather seats, in-flight entertainment, and a brand identity that borrowed heavily from his beer empire. He acquired Air Deccan not to run a budget airline but to get the landing slots and routes. The result was an attempt to run two completely different business models simultaneously, which satisfied neither. By 2012 the airline was grounded, buried under roughly 9,000 crore rupees in debt. Mallya left India in 2016 and has been fighting extradition from the UK ever since, wanted for fraud and money laundering. The airline that once held 26% of the domestic market vanished overnight, leaving thousands of employees unpaid.

Jet Airways was never a budget carrier but its story is inseparable from any account of Indian aviation. Founded in 1993 by Naresh Goyal, it was for many years the country’s best full-service airline. It collapsed in April 2019 after 26 years, grounding 20,000 employees and leaving passengers stranded across the country. A consortium purchased it in 2021 with promises of revival. As of 2025, it has still not properly restarted. The slots and routes were absorbed by other carriers, primarily IndiGo.

Go First (originally GoAir) was operated by the Wadia Group, the conglomerate behind Bombay Dyeing. It ran from 2005 and had built a reasonable mid-size operation before filing for voluntary insolvency in May 2023. The immediate trigger was Pratt & Whitney engine problems that grounded a large portion of its A320neo fleet, but underlying financial weakness made recovery impossible. Passengers who had already booked tickets were left with nothing.

SpiceJet remains alive, which is itself a kind of achievement. It has had multiple near-death experiences: a near-collapse in 2014 that required an emergency rescue by its founder, a 2022 safety review that grounded several aircraft, and persistent cash flow problems that have never fully resolved. Whether that represents resilience or stubbornness depends on your perspective.

Air India is in a category of its own. Founded in 1932 by J.R.D. Tata as Tata Airlines, it was nationalised in 1953 and spent the next seven decades as a bloated, politically managed, loss-making state carrier. The government tried and failed to sell it several times before finally succeeding in 2022, when the Tata Group bought it back after 69 years. The symbolism was not lost on anyone. Tata has since merged it with Vistara, its joint venture with Singapore Airlines, acquired Air Asia India, and placed an order for 470 aircraft. The turnaround is real but slow. Losses remain enormous, service inconsistent, and the legacy of decades of mismanagement does not disappear quickly. Whether Tata can complete the transformation is one of the more interesting long-term questions in Indian business.

The pattern across all of them is consistent. India is a vast and underserved market that attracts enormous ambition, but margins are thin, fuel costs are high, competition is brutal, and the regulatory environment is unforgiving. IndiGo has outlasted them all by being disciplined where others were not. The 2025 crisis was a reminder that even discipline has limits.

New pilot fatigue rules came into force in November 2025, requiring longer rest periods and stricter duty hour limits. IndiGo had not recruited or trained enough pilots to cover the new requirements. The result was a cascade of cancellations that lasted more than a week.

The financial damage was severe. The share price dropped around 15%. Third-quarter profits fell 78%, from 2,448 crore rupees to 549 crore. The airline had to refund an estimated 500 crore rupees to passengers. The government fined IndiGo and ordered a 10% reduction in domestic capacity through to March 2026. CEO Pieter Elbers resigned.

The crisis exposed the fragility of running an extremely lean operation with almost no buffer. IndiGo had grown so fast, and on such tight margins, that there was no slack in the system when the rules changed. A single regulatory shift was enough to bring scheduling down entirely.

The monopoly question was being asked loudly by the time the dust settled. When one airline controls 55-60% of a country’s domestic capacity and it stumbles, there is nowhere else for passengers to go.