IndiGo’s spectacular meltdown in the first week of December left people stranded across the country. I was attending the media drive of the Tata Sierra in Chandigarh last weekend and many of my friends had severely delayed flights or cancelled flights. And stories of weddings and holidays being ruined filled social media.

But airlines can have meltdowns, earlier this year when operations were severely restricted at Delhi Airport due to fog, planes and passengers found themselves all over the country. And this is not just an Indian thing, across the world, every so often an airline has a massive flight meltdown. Sometimes triggered by weather, sometimes by strikes or sometimes by software.

It is possibly true that IndiGo’s poor planning of the Flight Duty Time Limitations (FDTL) issue was a major factor in the meltdown. But it is also true that the meltdown impacted an abnormal number of people simply because of IndiGo’s massive network and the fact that they have nearly two-thirds of the Indian aviation market.

I am a well-wisher of the airline, not only because I take 15-20 flights with the airline every year, I am a shareholder in the airline and have been one ever since the Initial Public Offering. I also believe that IndiGo is an important instrument for the Indian Government because I feel that it is India’s interest as a major global economy to have an airline, actually multiple airlines with global reach. We surrendered our aviation industry to middle-eastern carriers such as Emirates in particular, whose global dominance was achieved with Indian rupees.

But it will take a few years for Tata Sons to stabilise things at Air India and IndiGo’s growth over the past few years, particularly in the short and medium haul international sectors, has been stunning. Just look at connectivity to countries like Thailand, Cambodia, Vietnam and now China.

Early next year when IndiGo gets their first Airbus A321neo XLR aircraft with a much longer range, they will start flights between Delhi/Mumbai and Athens in Greece. India has become extremely close to Greece over the past few years, especially if you look at projects like the Indian Middle-East Europe Economic Corridor (IMEC) where Greece plays a pivotal role. Whether you like it or not, IndiGo plays a role in India’s diplomacy.

There is also the fact that IndiGo has been adversely impacted by the high rate of failure of the American Pratt and Whitney 1100G Geared Turbofan engine and over 40 IndiGo aircraft are still grounded for no fault of the airline. The failure of the American company to make ‘dependable engines’ as they promise on their logo was a major reason for the collapse of Go First.

This neatly brings me to the fact that the bankruptcy proceedings of Go First airlines. This was a completely and totally botched process. The airlines promoters and then administrators abused the process to not return the leased aircraft operated by the airline. While the Resolution Professional of Go First tried to argue that without planes the airline is worthless, it was nothing short of stealing assets. 

The leasing companies stopped supporting the aircraft, many of which couldn’t fly anyway thanks to Pratt and Whitney. It is true that Go First had severe financial issues before the engine

failures, but that was truly the straw that broke the camels back. And even when some engines were repaired, the aircraft lessors refused, rightly, to give them to Go First.

But here is where the Directorate General of Civil Aviation (DGCA) did not deregister the aircraft and did not allow leasing companies to take back their assets. A similar situation also occurred with SpiceJet which has been taken to court in India and the United Kingdom for not returning or paying leasing firms.

While SpiceJet still survives today, many of their aircraft are still grounded and they are mainly operating wet-leased aircraft. This is not the only story, the botched bankruptcy process of Jet Airways is well known. Many planes owned by the Naresh Goyal promoted airline are still gathering dust on the tarmacs of Delhi and Mumbai airport, assets that at one point of time worth almost two billion dollars and withering away.

A similar story played out with Kingfisher airlines, although all Airbus aircraft owned by the airline managed to be ferried out before the gory end and one plane, VT-VJM, Vijay Mallya’s personal private jet is believed to have been taken over by the Indian Air Force. That said, many ATR turboprops rotted away at Chennai airport and when the airport flooded they were not airworthy anymore.

The reason I am mentioning botched airline bankruptcies and the legal issues faced by SpiceJet here is that India’s reputation among global leasing companies is pathetic. Only IndiGo backed by its vast scale and Air India backed by the financial muscle of Tata Sons and Singapore Airlines can lease aircraft at globally competitive rates. Other airlines can only grow slowly, Akasa for example has been holding off on taking deliveries of ready aircraft allegedly because they are still negotiating leasing deals at globally competitive rates.

The other airlines in the Indian market such as Star Air and Fly91 are small and other start-up airlines ared finding it impossible to lease new planes unless they either pay usurious monthly rentals or have massive deposits. Starting up with older, less economical planes is the only option some have but even then, the amount that they pay is higher than start-up airlines in most parts of the world. This will not allow them to be economically competitive with the likes of IndiGo.

Let us face the facts, while business passengers prioritise timings and frequency over fares, tourists prefer cheaper flights. And on both these sides, no start-up can compete with IndiGo and Air India to an extent, unless they are willing to burn money for half a decade.

And if a well-capitalised conglomerate and promoter like Bombay Dyeing and the Wadia family can’t keep an airline going, what hope do startup airlines have? Even if the Government gave startup airlines breaks on landing and navigation fees, if they cannot get planes at competitive rates, or at all for that matter, how will they fly and compete.

The only solution is if Indian financial institutions get into the business of aircraft leasing. Given Indian aviations massive growth and continued prospects, this actually makes sense, if the Finance Mijnistry gave some incentives to Indian leasing companies, some breaks are being provided through GIFT City in Gujarat. Indian financial institutions might be better placed to deal with the Indian legal and bureaucratic system, especially the IBC.

To blame IndiGo for ‘becoming’ a monopoly is unfair, it was enabled to become a quasi-monopoly. And likely due to no intention of theirs but thanks to the circumstances listed above. India needs globally-competitive airlines and IndiGo is important towards that end, but India also needs a few more large airlines because we cannot be so reliant on one airline alone. How and when that will happen, remains to be seen.

Author is a senior journalist, Printer and Publisher of ‘The Pioneer’