Indian Airline Industry

Indian aviation industry has been ruled by the two state airlines: Air India and Indian Airlines for quite a while. Till 1990 there were very strict rules for the new entrants on operating their air taxis. No private carrier was allowed to fly more than 700 Kms at a stretch. The government disapproved the privatisation of the state airlines despite the losses incurred by them. For 40 years the 2 airlines ruled the Indian aviation industry. It was only in 1990-1991 that the “open skies” policy was introduced were scheduling restrictions were lifted from private airlines. (Mhatre, 1993)

The liberalisation boosted a number of airlines in the market. Some of the early entrants were East West airlines, Modiluft, Jet airways, Air Sahara, Damania Airways etc. The private airline industry also got a boost because of the state airline pilot going on strike helped them gain customer base. In the middle of 1990s there was an opportunity for a huge expansion of air traffic in India. The government's economic survey predicted 12-14% growth. Unfortunately most of the airlines were unsuccessful either due to legal battles or a bad professional management. The two players who survived and sustained in the market were Jet Airways and Air Sahara. (Mhatre, 2000)

Since 1996 Jet Airways has strengthened its spot to become the No. 1 private carrier in India, giving state-owned Indian Airlines a run for its money. (Mhatre, 1997)
It continued to be the market leader with Indian airlines and Air Sahara behind. The market was slow and the airlines had ups and downs with regulations.

Changes in the industry over the years

➢ Deregulation and liberalisation: The state airlines controlled the market for 40 years but when they were not able to fulfil the desired demand of the customers and the continuously occurring losses to the government due to them