‘We need five pillars in aviation’: Aviation minister says India has capacity for 5 big airlines

Civil Aviation Minister K Ram Mohan Naidu on December 8 used the ongoing IndiGo disruptions to make a broader point about market concentration in Indian aviation, telling Rajya Sabha that the country already has the demand and economic capacity for five major airlines, not just the two dominant players currently shaping the sector. 

The minister said the government had anticipated India’s rapid growth in air travel and had been working “continuously” to expand competition, strengthen leasing frameworks and encourage new entrants. His remarks came as MPs raised concerns about airline monopolies, flight cancellations and fare spikes triggered by last week’s operational crisis at IndiGo. 

Opening his response, Naidu said, “We have envisioned the demand to be growing at such a rate that we want to have more airlines in the picture. And I have continuously said on the floor of the house in both the houses and outside also whenever I'm speaking that India today has the capacity of five big airlines. We are talking about two airlines, but the capacity, the demand that India is creating we need to have five big airlines.” 

He stressed that the ministry’s long-term efforts were aimed at lowering barriers for new carriers and aligning India’s aviation ecosystem with global standards. He pointed to Parliament’s passage of the Cape Town Convention legislation, which protects interests in aircraft objects and is intended to make leasing easier for airlines starting up in India. 

“To align our civil aviation industry, align our leasing industry for aircrafts according to global standards… it becomes easier for them to lease the planes,” he said, noting that 80-85% of aircraft operated by IndiGo, Air India and other major carriers are already leased. “People are not owning the planes by themselves… and we wanted India to be there in that picture.” 

Naidu also underscored the impact of the UDAAN regional connectivity scheme, which expanded airport networks and routes in smaller towns. He argued this created space for new entrants to flourish. “There is Fly91, there is Star Air, there is India 1 Air… the smaller airlines also which we have encouraged in the last 5-6 years.” 

Calling this “the time to start an airline in India,” Naidu said the government wants “more pillars” in the industry to counter concentration and build resilience. “There is so much growth that is happening. So let us all encourage more airlines to come into this industry along with the government.” 

AIADMK MP M Kambidurai pressed the minister on why stricter regulatory action wasn’t taken earlier, citing his own experience of waiting at Delhi airport “from 6 o'clock up to 2 o'clock” to board a Chennai flight. He questioned why airlines continued booking tickets despite operational stress, adding that Air India’s business-class fares had touched ₹75,000 on some routes. 

Responding, Naidu said passenger rights were central to the ministry’s actions, including the mandate to refund all affected IndiGo passengers promptly. “We have observed cancellations of 5,86,705 PNR for which ₹569 crores has been given,” he said. 

On whether the DGCA had been slow to act, he insisted the regulator had intervened “multiple times before also” wherever non-compliance was detected. “There have been many instances… we have already penalised them. We have taken multiple actions. That is a continuous activity.” 

Naidu also confirmed that the government had temporarily capped fares across four distance-based slabs in response to last week’s disruptions. “We have capped the fares, sir… because there is a shortage in capacity,” he said, adding that the ministry routinely steps in during peak seasons or crisis situations to prevent passenger exploitation. Examples included the Srinagar flight disruptions and the Kumbh Mela. 

He said the ministry is monitoring the situation to ensure “passengers are thoroughly protected” and that learnings from the IndiGo crisis will be reflected in future aviation regulations. 

Throughout his remarks, the minister reiterated the government’s broader objective: making India a five-airline aviation market robust enough to withstand shocks and offer passengers more choice, better pricing and stronger service standards.