India's aviation sector, dominated by a powerful duopoly, saw a flicker of potential change recently. Civil Aviation Minister Kinjarapu Ram Mohan Naidu announced on Tuesday that three proposed regional carriers—Shankh Air, Al Hind Air, and FlyExpress—have received no-objection certificates (NOCs) from the ministry. This news, coming weeks after major operational disruptions by market leader IndiGo in early December 2025, sparked initial excitement about increased competition. However, aviation experts and industry track records suggest this development is unlikely to dent the formidable market control of IndiGo and Air India, which together command over 90% of domestic capacity.
The Long Road from NOC to Takeoff
An NOC is merely the first, and simplest, step in a long and arduous journey to becoming an operational airline. It allows a company to begin the formal setup process, including establishing offices and hiring staff, but it does not permit commercial flights or ticket sales. The real challenge begins afterward. To even apply for the critical Air Operator Certificate (AOC) from the Directorate General of Civil Aviation (DGCA), a company must first induct at least one aircraft.
This presents a major financial hurdle. Leasing aircraft, the common route for startups, requires substantial security deposits and bank guarantees, often running into several crores of rupees. Furthermore, aircraft manufacturers and lessors are currently prioritizing deliveries to large, established carriers with proven track records, making them cautious about committing scarce resources to untested new entrants.
Structural Barriers and a History of Failures
The history of India's regional aviation market is littered with cautionary tales. While airlines like StarAir, Fly91, and government-owned Alliance Air have found relative stability, many others have failed. The list of shutdowns includes Paramount Airways, Air Pegasus, Zoom Air, TruJet, Air Odisha, and Fly Big, which ceased operations as recently as October.
This pattern underscores a harsh reality: regulatory clearances alone cannot overcome the market's structural challenges. Deep capital reserves, reliable access to aircraft, and sustained demand on regional routes are essential for survival. Mark D Martin, founder of Martin Consulting, notes that most small airlines receiving initial clearances never scale up enough to affect the market share of incumbents, with many shutting down before operations even stabilize.
Why the Duopoly Remains Secure
The announcement of new NOCs, while symbolically significant, does little to change the fundamental economics of the industry. The dominance of IndiGo and Air India is built on massive fleets, extensive route networks, brand loyalty, and significant financial backing. For a new player to compete, it must navigate high operational costs, intense price competition, and the immense challenge of building consumer trust from scratch.
Even Air Kerala, which received its NOC in mid-2024, illustrates the gap between approval and execution. Operated by Zettfly Aviation and founded by Indian-origin entrepreneurs in the UAE, it has yet to induct a single aircraft—a prerequisite for its AOC application—despite earlier media reports suggesting a 2025 launch.
In conclusion, while the government's issuance of NOCs signals a nominal openness to new entrants, the formidable barriers to entry and a history of sectoral failures mean India's aviation market is set to remain a de facto duopoly for the foreseeable future. The path from an NOC to a successful, competitive airline is fraught with financial and operational challenges that few startups have managed to overcome.
