Shankh Air previously received its NOC, while 2 new airlines, Al Hind Air and FlyExpress were cleared this week. An NOC permits setting up operations but not commercial flying.
Boost for Aviation Competition
The central government has issued No Objection Certificates (NOCs) to two new airlines, Al Hind Air and FlyExpress, aiming to boost competition in India’s concentrated civil aviation sector. This strategic decision, confirmed by Civil Aviation Minister Ram Mohan Naidu, follows market disruptions at IndiGo crisis that underscored systemic risks. Shankh Air had previously secured its NOC. Encouraging new entrants is vital for enhancing connectivity, expanding capacity, and deepening competition, aligning with initiatives like the UDAN scheme.
The Indian domestic aviation market is currently dominated by an unprecedented level of concentration. IndiGo, operating under InterGlobe Aviation, commands over 60% of the market share.
The Tata-owned Air India Group, which includes Vistara, Air India Express, and AirAsia India, holds a substantial 25%. Together, these two airline groups transport nearly 90% of all domestic passenger traffic. This significant concentration limits consumer choice and creates a potential vulnerability to system-wide failures.
Concerns over this market structure were heightened earlier this month. IndiGo faced widespread disruption, suddenly canceling hundreds of flights nationwide over several days. This was due to difficulties in implementing new crew-rostering norms.
The incident powerfully demonstrated how operational challenges at a single, dominant carrier can trigger massive disruption for millions of passengers. This event has reinforced the government’s determination to introduce new competitors and diversify the market.
The Road After indigo crisis: From Paper Approval to Commercial Flights
The granting of an NOC is the foundational first step, officially allowing the airlines to formally begin their corporate and operational setup processes, including capital raising, organizational structuring, and site selection. However, it is crucial to note that an NOC does not authorize commercial flying.
The next, and considerably more challenging, regulatory hurdle for these new entrants is securing an Air Operator Certificate (AOC) from the Directorate General of Civil Aviation (DGCA). The process for obtaining an AOC is rigorous and involves multiple phases, requiring the aspirants to conclusively demonstrate:
Comprehensive Safety Systems: Establishing and demonstrating fully functional, DGCA-compliant safety management systems, maintenance protocols, operational control centers, and crew training programs.
Robust Financial Capability: Proving they have the necessary capital and stable financial backing to sustain long-term operations.
Aircraft Acquisition: Finalizing leases or purchases of the required fleet.
2 New airlines profiles
The new entrants bring diverse business plans and geographical focus:
Shankh Air: Already cleared for the next stage, Shankh Air has announced a focused strategy targeting connectivity within India’s most populous state. Their plan is to concentrate on connecting key cities in Uttar Pradesh, including Lucknow, Varanasi, Agra, and Gorakhpur, directly benefiting from the state’s rapidly developing infrastructure.
Al Hind Air: This venture is backed by the well-established Kerala-based Alhind Group, known primarily for its presence in travel and tourism, suggesting a potential focus on connecting the South with other key regions or potentially tapping into international charter opportunities once established.
FlyExpress: This airline is supported by a prominent Hyderabad-based courier and cargo services company, indicating a potential strategic integration of cargo and express logistics services alongside passenger transport, capitalizing on the booming e-commerce market.
Kaashika is a social media strategist and financial content creator at Lakshmishree. She specialises in simplifying complex IPO and stock market concepts into clear, easy-to-understand content. Having created over 500+ pieces of financial content across reels, blogs, website posts and digital creatives, Kaashika helps audiences connect with the world of finance in a more accessible and engaging way.
