Aviation sector duopoly deja vu

India’s travellers will not allow a duopoly in the aviation sector because the region is one of the most price conscious and discerning air travel markets in the world.

Of the 76 years that India’s been independent, 50 have been under government directed production or license regimes where Indians bought largely from no more than two companies/entities. Choice or preferences weren’t important for a product or a service because no one cared. Frankly, no one in the government then bothered because the focus was on providing jobs, a livelihood, and bringing India out of its colonial hangover.

 Pre-1992 consumers in India saw a duopoly, where choices, likes, and preferences were luxuries seen to besmirched Indians. Thums Up-Campa Cola, Sprint-Gold Spot, MTNL-BSNL, Premier Padmini-Hindustan Ambassador, Taj Hotels-Ashoka Hotels, Tata Steel-SAIL Steel, and Air India-Indian Airlines.

Changes and choice

We’ve been there — the India of the 1980s arm-twisted you to accept what you were given and keep quiet. Doordarshan, Indian Railways, State Bank of India, All India Radio, LIC, Super Bazaar, and Air India (and Indian Airlines) were not only all that we had, but all that we were allowed to have. Mercifully, that changed.

After India’s economic liberalisation in 1992 by Finance Minister Manmohan Singh, the base objective with India and its mobility was to have a market and economy that was driven by the consumer — not a government or a public service undertaking. Thus, began radical changes in government policies that allowed travellers the ability to select a travel service that suited their convenience. This opened the aviation sector to the likes of Jet Airways, Sahara, Kingfisher Airlines, Paramount Airways, Air Costa, NEPC Airlines, Damania Airways, Go Air, SpiceJet, Air Asia, Vistara, Akasa, VIF Airways, KCV Airways, East West, Gujarat Airways, UP Air, Raj Air, and several other regional airlines where competition and consumer preference formed the basis of air travel in India. The rest is history.

The duopoly déjà vu?

Its adorable how the discourse today is about a ‘duopoly’ with India’s airlines and its parenthesis based on a momentarily strong IndiGo and incubating ‘new’ Air India. Granted, the mortality rate of an airline is possibly worst for any region in the world — India has the unique distinction of one surviving airline for every four either shut down, in bankruptcy, or its promotors living in Venezuela — but the logic of a duopoly is miles away from reality.

For starters, India’s travellers won’t allow that to happen because the region is one of the most price conscious and discerning air travel markets in the world. Indians thrive on choices and options, and that usually triggers someone enterprising enough to take the plunge to capture the market with a ‘choice’ or ‘option’ airline idea. Then, the government would not want India’s air travel market to have anyone even close to ‘absolute-power’.

No brainer that India has something called the Competition Commission of India (CCI) that acts like an imperative check and balance, and brings those trying to dominate the market to account while ensure the passenger is not suffering. To top it, the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation will sort airlines out if domestic travellers end up having a rough time with getting a decent deal on an airline ticket.

Besides, India will not stand for a duopoly because we’ve been burnt, singed, and battered with the past traumas of having only an Indian Airlines and Air India that were ‘absolute-power’, and an exasperating and infuriating experience with booking tickets, dealing with wait lists, harsh and rude airline staff, indifferent crew — overall, a lousy service.

Thankfully that changed with competition when there were more than two options. Those who witnessed this up close and personal in the 1980s and 1990s can relate to how private airlines made Air India and Indian Airlines change its ‘monopolistic-duopoly’ ways for the better.

Airlines loading…. please wait

What looks like ‘absolute power’ shared between Air India (with Vistara, Air Asia, and Air India Express) and IndiGo is a mere smokescreen amidst SpiceJet living on borrowed time and Go Air spending its days as invalid thanks to Pratt & Whitney engines that break. India is the world’s largest air travel market with a travelling population of 240 million one-way travellers.

Akasa Air has a fleet of 20 aircraft within 18 months of operation, and is set to be 70-plus aircraft within the next 24 months. In the next few months, we’re likely to see Go Air return with prosthetics of some kind — either with older Airbus A320ceos or ACMI Airlines stepping in to help balance out yield, earnings, and market pricing of tickets. Keep a watch for Fly 91 airlines that’s in the works, and Sanjay Ghodawat’s Star Air.

India’s airline landscape is all about the survival of the fittest, and about those that are determined to fight for the people’s right, and that’s always come of the little guy. Ravana had Ram, Goliath had David, and Voldemort had Harry Potter, and there are more than a few little guys taking bold steps to take on the Air Indias and the IndiGos of the world.

(Mark D Martin MRAeS is CEO of Martin Consulting, an aviation consulting firm based in Asia. Views are personal.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.