Air India's loss is IndiGo's gain.
While the Tata group carrier lost domestic market share amid months of operational disruptions and capacity cuts, IndiGo's share climbed to a record high, with nearly two out of every three passengers in India flying on the country's largest airline.
In June, the budget carrier's domestic market share expanded to 66.3%, while the Air India group's share fell to 23.9%, showed data released by the Directorate General of Civil Aviation (DGCA).
A year ago, IndiGo, owned by InterGlobe Aviation Ltd, held a 64.5% share and the Air India group, which includes full-service carrier Air India and budget airline Air India Express, accounted for 27.1%.
The shift has largely been driven by capacity, with the Air India group operating about 3,900 fewer domestic departures in April and May than a year ago, a decline of around 7%, according to DGCA data.
In contrast, IndiGo expanded capacity by 12%, operating more than 13,000 additional domestic departures during the two months.
The June domestic departure data is yet to be released by the civil aviation regulator.
Fight for the skies
In a 15 June note, Kotak Institutional Equities said Air India was operating nearly 25% fewer flights year-on-year during the first week of June, affecting both its domestic and international networks.
“Air India's capacity cuts, if sustained through FY27/28, would help stiffen pricing for the sector, even as IndiGo keeps driving volumes and lowers the risk of demand destruction of a material quantum,” the brokerage said.
Air India, however, expects the weakness to be temporary. On 17 July, its chief commercial officer Nipun Aggarwal said the airline plans to restore capacity across most domestic and international routes from September onwards as operational disruptions ease.
The contrasting fortunes also coincide with leadership transitions at the country's two largest airlines. IndiGo named former British Airways chief ‘Willie’ Walsh as its chief executive, less than a month after Pieter Elbers resigned in March, while Air India is still searching for a successor to Campbell Wilson, who announced in April that he would leave the airline by September.
Meanwhile, Akasa Air continued to gain traction with steady fleet additions, while SpiceJet remained constrained by financial and operational challenges.
SNV Aviation-promoted Akasa Air has cemented its position as the country's third-largest airline, with its market share rising to a record 6.4%. Ajay Singh-promoted SpiceJet—weighed down by a prolonged operational constraints, legal battles with lessors, grounded aircraft, and a depleted fleet of just 11 planes, maintained its share at 1.9%—its lowest ever.
Akasa increased domestic departures by 16% during April and May, operating 1,356 more flights than a year ago, while SpiceJet, despite adding 195 departures, or about 3%, continued to lose ground as operational issues outweighed the marginal increase in capacity, showed DGCA data.
Market leadership
Delayed aircraft deliveries, fleet retrofits, aircraft retirements, and supply-chain bottlenecks have reduced aircraft availability at Air India, enabling IndiGo to capture a significant portion of the displaced demand and expand its market share to a record high, said Jainam Shah, aviation analyst at Equirus Securities.
“While Air India plans to restore most of its capacity from September, we believe a meaningful recovery in market share is likely to be gradual, keeping IndiGo well positioned to sustain its leadership,” he added.
Amit Mittal, aviation expert and director at Aerointellect Aviation, said that June market share data reflects a widening divergence in the country's aviation sector.
"The redistribution of market share suggests passengers affected by Air India's reduced capacity and SpiceJet's prolonged operational challenges have largely migrated to IndiGo,” he said, adding that “this is further widening the gap between the market leader and its rivals".
A stronger operational performance has supported IndiGo's growing dominance. It reported an on-time performance (OTP) of 89.4% across the country's ten busiest airports in June, ahead of the Air India group's 85.9% and Akasa Air's 82.7%. SpiceJet remained the laggard with an OTP of just 33.5%.
IndiGo also maintained one of the industry's lowest cancellation rates at 0.2%, compared with 0.49% for the Air India group and 6.23% for SpiceJet—the highest among scheduled domestic airlines.
Operational consistency has also helped the airline strengthen its grip on the market even as rivals grapple with fleet shortages, maintenance issues, and network disruptions.
IndiGo, Air India, Akasa Air and SpiceJet did not respond to Mint's emailed queries till press time.
The June data also showed domestic airlines carried 13.5 million passengers, bringing passenger traffic in the first six months of 2026 to 86.4 million, up 1.44% from a year earlier.
“Despite capacity cuts in the industry, passenger traffic has remained broadly stable, reflecting stable underlying demand,” said Eqirus' Shah.