Monopoly, ahoy! Indigo is the sole airline flying on 552 out of 1,048 routes in India

While talks of a duopoly are doing the rounds, the fact is, 769 out of 1,048 routes are a monopoly, i.e., only one airline operates on that route. While routes under the Regional Connectivity Scheme (RCS) guarantee exclusivity, a look at the schedule shows that monopoly routes beyond RCS include those connecting major cities such as Kolkata and Ahmedabad, Hyderabad and Ahmedabad, Chennai and Ahmedabad, Delhi and Nagpur and Chennai with Pune.

A staggering 552 routes of the 769 monopoly routes — 72 percent — are operated by IndiGo. Indeed, of the 830 routes that IndiGo flies in India, 66 percent (552) are a monopoly. Should one blame IndiGo for the monopoly or be thankful? Being a monopoly is a double edged sword but it isn’t always a bad thing.

A careful look at the schedule shows that the airline has managed to connect cities that are not mandated under the Route DIspersal Guidelines. This includes flights to Goa (Manohar International Airport) from Bhopal, Vadodara, Dehradun or Rajkot. Connections between Tier 2 cities such as Lucknow and Ranchi, or Bhopal and Udaipur. This typically fuels tourism as well as trade.

IndiGo and who?

There are only 24 routes among all the routes that IndiGo operates where it is not the frequency leader, i.e., another airline has more frequent flights than IndiGo. However, this is when Air India, Air India Express, AirAsia India and Vistara are different airlines.

Club them together, and there are 79 routes where the Air India group airlines have more frequencies than IndiGo. There are 145 routes where there is a duopoly.

IndiGo’s market share will continue to be high

IndiGo is slated to operate 60 percent of all frequencies in India. In terms of seats on offer, this translates to 64 percent. Air India is next with 10 percent of total seats on offer, followed by Vistara and AirAsia India at 8 percent each. The Tata group airlines thus make up 26 percent of all capacity.

In a country where the capacity share largely reflects the market share, with no player expanding rapidly in the immediate future, IndiGo’s market share is likely to remain between 55 percent to 60 percent if not over 60 percent every month.

Battle for the rest?

SpiceJet’s share is just 4 percent of total seats on offer, while Akasa Air is already at 3 percent. While SpiceJet has stated that it will induct additional capacity in phases, its earlier announcements on taking delivery of additional MAX aircraft have disappeared into thin air. How many aircraft return to the air and when remains to be seen. Can Akasa also induct more aircraft by then? Supply chain issues have pushed everybody’s fleet expansion plans.

Akasa Air has more capacity than SpiceJet in Mumbai, Bengaluru, Guwahati, Chennai and Ahmedabad among the top 10 airports, while it is neck to neck in Hyderabad. SpiceJet remains stronger than Akasa Air in Delhi, but even at the largest airport in the country, SpiceJet’s share remains 9 percent whereas IndiGo is at 46 percent. The Tata group airlines have a 42 percent share in Delhi (Air India and Vistara at 17 percent each, and AirAsia India at 8 percent).

Tail Note

Many cities have seen air services snap when an airline goes down. Over the years, routes and cities have lost connectivity. IndiGo and airlines from the Tata group have a relatively better record. Strong airlines also bode well for airports — especially those that had been saddled with pending dues in the past when an airline went down.

The only question that now remains is fares. Will this stranglehold push airfares up to the level that passengers will not be able to afford them? Perhaps. Then again, in India, affordability is a relative term. And the answer to that question will emerge sooner rather than later.