RQ | Market Share Of Indian Air Operators

Not so long ago, we had a CAG report that discouraged giving sixth freedom rights to Gulf-based airlines, the argument being that it was reducing the market share of Indian airline companies, and was reducing the chances of Delhi airport ever becoming a hub. In that report, the CAG had also claimed that the granting of these sixth freedom rights was hurting the financial performance of Air India.

The Ministry of Civil Aviation, via the government data portal, has put out data on the market share (in terms of number of passengers and amount of cargo) of Indian and Foreign airlines for flights to and from India. While the data strangely refuses to mention the units for some of the variables, that doesn’t prevent us from calculating the market share of Indian carriers in the passenger and freight markets. The graph below summarizes this:


What is interesting is that the market share of Indian carriers in terms of both passengers and freight grew significantly between 2006 and 2011, slowing down a bit towards 2012 (wonder if Kingfisher’s demise adequately explains that). While this was the time when many of those sixth freedom rights (that the CAG was so opposed to) were granted, this was also the time period when privately owned Indian airlines started expanding globally and adding international routes.

This suggests that the reason for Air India’s losses lie less in the grant of the sixth freedom rights – which only grew the market, and more to do with the quality of service provided by the airline vis-a-vis both foreign carriers and privately owned Indian carriers.

What can also be seen from the above graph is that there is perhaps significant scope for expansion of Indian carriers when it comes to Air Cargo where their market share is minuscule compared to their passenger market share.

DISCLAIMER: This is an archived post from the Indian National Interest blogroll. Views expressed are those of the blogger's and do not represent The Takshashila Institution’s view.