Can all of India’s new airlines survive an extremely tough market?

India’s aviation market is on the verge of something monumental.

The Indian aviation sector has reached a critical juncture, with the potential to solidify its place as a global powerhouse in air travel.

The Indian government’s push to expand its aviation infrastructure is undeniable, with plans to build over 200 airports and a significant increase in domestic flight capacity. As Civil Aviation Minister Kinjarapu Rammohan Naidu pointed out, India will need 4,000 additional planes over the next two decades to meet soaring demand.

The country is already the world’s third-largest domestic aviation market and one of the fastest-growing. But while the numbers are impressive, the question remains: Can India’s new entrants into the airline space not only keep up with this growth but lead it?

Over the past few months, the aviation market has witnessed the arrival of new players like Akasa Air, Fly91, and Shankh Air, all vying for a slice of an increasingly crowded market. They bring fresh hope to the industry, but face an uphill battle. The big players, like IndiGo and Air India, have already established dominant positions, and it will take more than just an entry into the market to disrupt that.

Take Akasa Air. Launched in 2022, it has shown promise with its budget-friendly model. But the realities of India’s complex regulatory environment and the pressure to maintain a fleet while offering competitive prices can make survival a challenge.

In fact, Akasa faced a significant blow last August when the Directorate General of Civil Aviation (DGCA) issued a show-cause notice over operational lapses. It’s these growing pains that new airlines must navigate if they want to succeed.

The numbers behind India’s aviation growth are compelling: air passenger traffic is expected to double over the next five years, and India is poised to require 4,000 additional planes in the next two decades to meet demand. The government is investing over $11 billion into airport infrastructure to keep pace with this boom.

Yet, these are not the only figures that matter. The reality of sustaining growth in such a competitive market is where the challenge lies. New entrants may be entering an expanding market, but it’s a market that’s already fiercely contested.

India’s market dynamics are unique — demand is skyrocketing, but operational constraints such as airport capacity, the rising cost of fuel, and the unpredictability of the global economy make it a tightrope walk for new players.

There’s the critical issue of airline profitability. It’s easy to be caught up in the excitement of launching an airline, but maintaining it requires more than a shiny new fleet and catchy marketing.

The financial sustainability of these airlines will depend heavily on their ability to balance aggressive expansion with cost controls, customer loyalty, and the unpredictability of an industry that’s as volatile as it is lucrative.

The development of new airports and terminals is essential in supporting the increasing demand. An $11 billion investment in infrastructure is not only necessary; it’s vital. Without it, the dream of a ‘Made-in-India’ aviation ecosystem will be stunted, and we risk stifling the growth of local airlines, limiting the potential of homegrown talent and resources.

In parallel, the vision of manufacturing ‘Made-in-India’ civil aircraft, as seen with the Tata Aircraft Complex in Vadodara, represents an opportunity for India to develop an aviation ecosystem that extends far beyond just flying planes.

If India can innovate in aircraft manufacturing and increase its domestic capacity, it can move from being a market dependent on foreign-made planes to one that contributes globally.

It’s far from certain that the new entrants will succeed in this highly competitive market. There’s no doubt that the infrastructure is improving, the demand is soaring, and the government is investing significantly. The success of these new airlines will depend on a variety of factors: their ability to operate efficiently, their financial sustainability, and the ever-present challenge of ensuring customer satisfaction in a price-sensitive market.

New players must be prepared for a long and difficult road. Success will not come from simply entering a growing market; it will come from being nimble, innovative, and resilient in the face of fierce competition.

If India’s new airlines can overcome the challenges and thrive, the country’s aviation sector will be set for a global transformation — and that’s something worth betting on.