Aviation minister calls for new airlines after IndiGo debacle: Is starting an airline in 2025 easy?

Fresh off the IndiGo crisis that almost brought the Indian aviation sector to a standstill last week, Union Aviation Minister Ram Mohan Naidu Kinjarapu tightened his grip on the airline on Tuesday at the Parliament.

At the Lok Sabha floor, the Aviation Minister said, "No airline, however large, will be permitted to cause such hardship to passengers through planning failures, non-compliance..."

The message was more than clear. Kinjarapu not only acknowledged the airline duopoly in India but also called for more airlines to start in the country.

"IndiGo disruptions are stabilising; all other airlines continue to operate smoothly across the country. Airports across the country are reporting normal conditions, with no crowding or distress. Refunds, baggage tracing and passenger support measures remain under the supervision of the Ministry," he said.

"DGCA has issued show-cause notices to IndiGo’s senior leadership and commenced a detailed enforcement investigation. Based on the report, strict and appropriate action will be taken," affirmed the minister.

Of course, duopoly and monopoly are killers of good service. And India does need more airlines. But how easy is launching an airline in India in today's day and age?

Checklist for new airlines

According to the latest Ministry of Civil Aviation’s guidelines, any new scheduled airline requires a substantial financial safety net. A startup operating aircraft heavier than 40,000 kg (like Boeing 737s or Airbus A320s) needs a paid-up capital of Rs 50 crore for a fleet of up to five aircraft.

As per Civil Aviation Requirement (CAR) Section 3, obtaining a No Objection Certificate (NOC) is the first hurdle. This NOC is valid for three years, during which the airline must secure its Air Operator Certificate (AOC).

The Directorate General of Civil Aviation (DGCA) mandates a rigorous five-phase certification process for the AOC, checking everything from safety manuals to staff training.

Then there are aircraft rules. DGCA regulations regarding fleet age are strict. Pressurised aircraft imported for passenger services generally must not be more than 18 years of age. Moreover, the Bureau of Civil Aviation Security (BCAS) requires security clearance for the company’s directors and the airline’s security manual before operations can commence.

And of course, the FDTL requirements that were IndiGo’s Achilles Heel. The Centre will now double down on them.

The Indian airline graveyard

Once an airline firm becomes operational after all that red tape, there is also the curse of the Indian skies it needs to overcome. The Indian market is famously a graveyard for the airline sector, where many ambitious carriers breathed their last:

• East-West Airlines (1996): India’s first private airline shut down due to financial troubles and management issues.
• ModiLuft (1996): Despite high standards, this Modi Group Lufthansa JV couldn't survive the competitive pressures and partnership disputes.
• Air Sahara (2007): Struggled to stay profitable and was eventually bought by Jet Airways.
• Air Deccan (2007): The low-cost pioneer (that started the IndiGo-Vistara-Akasa wave) merged with Kingfisher due to mounting losses.
• Kingfisher Airlines (2012): Grounded by massive debt and mismanagement, leaving unpaid employees and creditors.
• Jet Airways (2019): Once India’s premier carrier, it collapsed under a mountain of debt and operational losses.
• Go First (2023): Filed for bankruptcy, citing engine troubles and financial instability.

And these are just the major names. Many were killed in the 1953 nationalisation drive, where the Centre absorbed all the airlines into two entities: Indian Airlines for domestic routes and Air India for international routes.

And smaller players like Damania Airways, Paramount Airways, Indus Airways, Air Costa, Air Pegasus, and Zooom Air, did not spread their wings far enough for many to even remember them.

So yes, India needs more airline players. The market demands them. But are the costs too high, or is it the price of doing business... the price of flying close to the sun?