India's competition watchdog, the Competition Commission of India (CCI), has initiated a formal probe into the country's largest airline, IndiGo, following the massive operational disruptions that crippled its network in early December. The investigation will examine whether the carrier, which commands a 65 per cent share of the domestic passenger market, abused its dominant position, violating competition laws.
The Trigger: A Network Brought to Its Knees
The probe was triggered by the severe flight chaos that left thousands of passengers stranded across India. The crisis peaked on December 5, when IndiGo was forced to cancel over 1,600 of its 2,300-plus daily flights. The widespread cancellations over several days prompted calls from various quarters for the CCI to intervene and assess potential anti-competitive behaviour.
In a release issued on Thursday, the CCI stated it had "taken cognizance of Information filed against IndiGo" regarding the disruptions and decided to proceed with the matter under the Competition Act, 2002. A separate inquiry is already being conducted by a panel set up by the aviation regulator, the Directorate General of Civil Aviation (DGCA).
Root Cause: A Planning Failure on New Pilot Rules
According to the DGCA, the primary reason for the meltdown was IndiGo's under-preparedness for the second phase of the new Flight Duty Time Limitation (FDTL) norms for pilots, which took effect on November 1. The airline admitted to a shortage of pilots relative to the new requirements and cited "misjudgement and planning gaps" in implementing the rules.
The situation stabilised only after the DGCA granted IndiGo a temporary exemption until February 10 from certain night-duty related changes under the new FDTL rules. For the past week, IndiGo's operations have been stable, with the airline operating over 2,200 daily flights.
Dominance vs. Abuse: What the CCI Will Scrutinise
Legal and industry experts clarify that market dominance alone is not anti-competitive. The CCI's investigation will focus on whether this dominance was abused. Abuse of a dominant position occurs when a company uses its market power in an exclusionary or exploitative manner—such as through predatory pricing or denying market access—harming competition.
The CCI's process involves an initial assessment of available information. If it finds a likely contravention of the law, it orders a formal investigation. If proven, the penalties can be severe, including financial penalties of up to 10 per cent of the company's average turnover over the past three years.
IndiGo's market footprint is vast. Of the roughly 1,200 domestic routes flown by Indian airlines, IndiGo operates on over 950. Notably, it holds a monopoly on nearly 600 routes (63% of its network) and operates in a duopoly (with just one competitor) on about 200 more routes.
A Wake-Up Call on Market Concentration
Experts point out that the IndiGo crisis serves as a stark warning about the perils of high market concentration, a trend seen in sectors like telecom, cement, and e-commerce. While large, stable companies bring efficiency, problems arise when their market share becomes so overwhelming that it stifles competition, raises entry barriers, and creates systemic risk.
In customer-facing industries like aviation, the impact of a dominant player faltering is immediate and visible—fewer choices, potential for higher prices, and lower service quality during crises. Some analysts argue that IndiGo's dominance on many routes is less by design and more a result of the failure of competitors like Jet Airways and Go First. They contend that without a strong player like IndiGo, many routes might not be operational at all.
Nevertheless, government officials and experts agree that such a skewed market share in any industry is a cause for concern. The CCI's probe into IndiGo will be closely watched as a test case for balancing market dominance with consumer welfare and competitive practices in India's evolving economy.
