Double-engine sarkar (in the Indian skies) may be good news for airport operators

India has been a brutal market for aviation where even Kingfisher and Jet Airways, which were deemed too big to fail, fell out of the skies as they could not make ends meet.

There has been a lot of talk lately around how IndiGo continues to gain market share and,  with the Tata group airlines consolidating, how Indian aviation is headed towards a duopoly, and what that’ll do to fares.

India has been a brutal market for aviation with one or the other airline crashing periodically. Even the likes of Kingfisher and Jet Airways, which were deemed too big to fail, fell out of the skies as they could not make ends meet. Some news reports have indicated that Go FIRST owes the airports over Rs 60 crore.

But even during peak Covid, IndiGo paid its lessors on time, and Tata group-owned Vistara and AirAsia India did not lay off employees while continuing to pay the airports and their vendors.

So, the one corner of the sector that has been unflustered by the prospect of a duopoly, indeed, may even be looking forward to it if it were to happen, is the airports.

Also read: Air India-Vistara Merger: No adverse impact on competition, Tata group tells CCI

Why would airports be happy?

Over the years, IndiGo has done everything possible to increase its presence at metro airports. Whenever a competitor reduced flights or shut shop, IndiGo swept in and swooped up spots. As for the   Tatas, their family backing will ensure that their airlines stay aloft in the long haul.

There are 33 airports in India which have over 100 domestic departures a week. IndiGo is in a strong position at all of these. For example, IndiGo operates 91 percent of all departures in Nagpur, 87 percent at Raipur, and 84 percent in Indore.

At the top six airports of the country, barring Delhi, where IndiGo runs 46 percent of the domestic flights, it operates over half the departures at the others. Add the Tata airlines to the mix, and their combined share ranges from 82 percent in Bengaluru to 91 percent in Chennai and Kolkata.

Thus, from an airport’s perspective, nearly 90 percent of the flights are not at risk of default, something no airport in India is likely to have seen since private airlines came into the picture in 1993. At Trivandrum, an airport operated by the Adani group, 100 percent of the domestic market is with the two biggies — IndiGo and the Tata airlines. At AAI-owned and operated Coimbatore and Ranchi airports, the numbers stand at 99  and 97 percent, respectively. In 16 of the 33 airports with over 100 domestic departures a week, IndiGo and the Tata airlines combined have a share of 90 percent or more.

As more airports come up for privatisation, these numbers will go a long way in reassuring prospective players about the potential of the business.

Airline presence at top six airports (domestic flights)