CCI Investigation into IndiGo: How India’s Largest Airline Came to Dominate the Skies

Introduction: When Market Leadership Invites Regulatory Scrutiny

The Competition Commission of India’s (CCI) decision to examine IndiGo Airlines over mass flight cancellations marks a critical moment in India’s aviation sector. While the CCI has not yet specified the exact statutory violations, the probe assumes significance given IndiGo’s overwhelming 65% share of India’s domestic aviation market.

Market dominance, though not illegal per se, invites antitrust scrutiny when it appears to distort competition, consumer choice, or market access. IndiGo’s rise—from a modest low-cost carrier in 2006 to a near-monopolistic force by 2025—offers a textbook case study of how timing, policy gaps, industry failures, and capacity decisions can reshape an entire sector.

IndiGo’s Early Years: Right Place, Right Time

IndiGo, operated by InterGlobe Aviation Ltd., commenced operations in 2006 with a no-frills, low-cost model and a small fleet. Unlike its competitors, IndiGo focused on operational discipline, fleet standardisation, and high aircraft utilisation rather than aggressive branding or luxury services.

By 2009, IndiGo had increased its market share from 10% (2006) to 14%, quietly expanding while competitors were preoccupied with mergers and financial stress.

Industry Disruptions: Mergers That Weakened Rivals

Between 2007 and 2009, India’s aviation industry underwent chaotic consolidation:

  • Air India merged with Indian Airlines (2007), creating integration inefficiencies and ballooning debt.

  • Jet Airways acquired Air Sahara (2007) but retained separate operational structures.

  • Kingfisher Airlines merged with Air Deccan (2008) to qualify for international operations, significantly increasing financial strain.

At the time, the market appeared balanced:

  • Jet Airways: 25%

  • Kingfisher Airlines: 24%

  • Air India: 18%

  • Smaller carriers (SpiceJet, GoAir, Paramount): 19–20%

However, all carriers were competing for scarce slots at Mumbai and Delhi airports, creating structural congestion.

The Great Financial Crisis and Slot Vacuums

The 2008–09 global financial crisis proved decisive. Kingfisher reduced its fleet from nearly 90 aircraft to 66, gradually ceding valuable airport slots. IndiGo stepped in swiftly.

By 2012, Kingfisher collapsed completely, and Paramount Airways exited the market. IndiGo capitalised on the vacuum, expanding weekly flights at Delhi and Mumbai from:

  • 60 flights (2006)

  • 200+ flights (2007)

  • 350 flights (2009)

  • 900 flights (2012)

Slot allocation, driven by urgency rather than competition policy, heavily favoured carriers that could deploy capacity immediately—IndiGo foremost among them.

Consolidation Years: 2014–2019

Further industry contraction followed:

  • SpiceJet shrank operations in 2014

  • Jet Airways refocused on international routes post-Etihad stake sale

  • Air India lacked capacity due to chronic debt

By 2014, IndiGo held 31% market share.
By 2015, its share rose to 36.7%, while rivals steadily weakened.

The final tipping point came in 2019, when Jet Airways ceased operations, reopening massive domestic capacity. IndiGo was prepared. Others were not.

Pandemic Advantage: Capital Strength as Competitive Weapon

The COVID-19 pandemic proved fatal for several airlines but transformative for IndiGo:

  • IndiGo entered 2020 with 48% market share

  • Took delivery of 44 aircraft in 2020 alone

  • Continued inducting 4–5 aircraft per month, even during industry contraction

By 2023, IndiGo controlled nearly 60% of domestic traffic. Go First shut down. SpiceJet fell to 5%. Vistara and AirAsia India moved towards merger with the Tata-owned Air India Group.

Market dominance had crystallised.

Why the CCI Is Now Stepping In

The Competition Act, 2002 does not prohibit dominance. It prohibits abuse of dominance.

Relevant Statutory Provisions

Section 4, Competition Act, 2002
Prohibits abuse of dominant position, including:

  • Imposition of unfair conditions

  • Denial of market access

  • Practices resulting in foreclosure of competition

  • Leveraging dominance in one market to enter another

The CCI’s inquiry into mass cancellations may examine:

  • Whether IndiGo’s operational decisions unfairly impacted consumers

  • Whether dominance insulated the airline from market discipline

  • Whether competitors were structurally excluded due to slot concentration

Constitutional Dimensions

While aviation is a regulated industry, competition law enforcement intersects with constitutional principles:

  • Article 19(1)(g) – Freedom to carry on trade or business

  • Article 19(6) – Reasonable restrictions in public interest

  • Article 21 – Right to life, which courts have expanded to include consumer dignity and fair treatment in essential services

Unchecked market concentration in essential transport services may raise concerns of fairness, access, and consumer welfare.

Judicial Precedents on Dominance

Competition Commission of India v. Steel Authority of India Ltd. (2010)

The Supreme Court held that dominance is not illegal unless abused, emphasising effects-based analysis.

Fast Track Call Cab Pvt. Ltd. v. ANI Technologies (Uber case, 2019)

The CCI recognised that deep financial strength and pricing power could distort competition, especially in markets with high entry barriers.

MCX Stock Exchange v. NSE (2011)

Predatory strategies by a dominant entity, even if temporarily beneficial to consumers, were held capable of violating competition law.

These rulings may guide CCI’s approach to IndiGo.

Slot Allocation and “First-Mover Advantage”

A recurring theme in IndiGo’s rise has been institutional urgency. Whenever airlines collapsed, regulators and airports prioritised restoring connectivity. IndiGo was often the first to say “yes”.

This raised structural questions:

  • Were slot reallocations sufficiently competitive?

  • Did emergency decisions entrench long-term dominance?

  • Was consumer choice compromised over time?

The Road Ahead: Is IndiGo Too Big to Fail?

With Air India backed by the Tata Group, the competitive landscape is evolving. IndiGo’s recent operational disruptions have exposed the vulnerabilities of market concentration.

For nearly two decades, competitors squeezed into gaps IndiGo left behind. Today, those gaps may finally widen again.

The CCI investigation will test whether market leadership crossed into market abuse—and whether Indian competition law is equipped to address dominance created not by wrongdoing, but by systemic failure around it.

Conclusion

IndiGo’s ascent was not engineered by illegality but enabled by industry collapse, regulatory pragmatism, and unmatched execution. However, dominance brings accountability.

The CCI probe represents a necessary institutional moment: one that asks whether efficiency without competition ultimately harms the market it once saved.

Location: Pune, Maharashtra, India

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