- The nation’s growth prospects are not only defined by the economic activities undertaken vis-à-vis global standing but also by how the policymakers envisage framing of strategies keeping in mind the foreseeable future happenings. No one wishes to be left behind, you see. Modern-day governments across the globe have one thing in common i.e., to plan sound strategies to provide every conceivable amenity to the aspirational society’s quest to not be left behind others. As such, every country goes about ushering in policy frameworks that help its citizens to feel at par with their counterparts elsewhere. Citizen-centric technology-driven developments, innovations, inventions, and ingenious unearthing have become the norm for governments to adopt.
PC: Agencies
- People are not complaining one bit though. Even as the people’s earning capacity increases courtesy of numerous opportunities signifying economic well-being mirroring the country’s progression, every crucial sector becomes critical in supporting such humongous growth. The tourism sector has witnessed unbelievable advancements over the last few years and the Indian aviation sector has certainly lived up to its billing in more than one way. What was hitherto considered the sole bastion of the rich, high, and mighty, the civil aviation sector has opened so organically over the years that even an ordinary citizen can step into the aircraft for traveling. No wonder, the affordability factor has ensured ordinary citizens opt for the faster mode hugely.
- However, it cannot be construed that everything is hunky dory in the Indian aviation sector. Far from it, with the challenges encountered, especially during the pandemic period, and the ongoing Russia-Ukraine conflict posing a tremendous strain on the fuel prospects, all the aviation players in the fray are forced to undergo hardships. We know how Go Air filed for voluntary bankruptcy over a month ago, creating a vacuum in the domestic aviation market. It happened right in the middle of a season when demand is bound to surge, leading to a sharp increase in airfares on the routes it served. Insolvency proceedings in India don’t end quickly. Consequently, other airlines have begun to adapt and have enhanced flight frequencies. Not surprising, though.
PC: Debjit Sinha
- Moreover, when the third largest airline group pulls out overnight—it had a 6.4% market share in April—there’s bound to be an impact on prices. Mind you, India’s domestic aviation market faces a tricky situation. IndiGo and Tata Group’s airlines collectively control over 80% of the market, which makes the market a near-duopoly. Inadequate competition is unhealthy for a market, and the Union Government should find ways to make it more competitive. In the process, it should refrain from using a preferred method in India’s regulatory toolkit: price control. Price control usually helps already dominant firms. Indian aviation needs stronger competition to challenge the top two. As such, price control doesn’t enhance competition. This should be kept in mind.
