Mint Explainer | One approval doesn’t make a market: Why new airline NOCs won’t break India’s aviation duopoly
Several proposed regional airlines have received no-objection certificates, but these early approvals do little to change the structural barriers that have kept India’s aviation market firmly in duopoly territory.
NEW DELHI: Late on Tuesday, civil aviation minister Kinjarapu Ram Mohan Naidu tweeted that three proposed airlines—Shankh Air, Al Hind Air and FlyExpress—have received no-objection certificates (NOCs) from the ministry. With Air Kerala already holding one, the announcement appeared to signal a surge of new entrants into India’s regional aviation market.
But the impression that multiple new airlines are poised to take off is misleading. An NOC is only the first, and the easiest, step in a long regulatory and financial process. In most cases, it never results in an operational airline—let alone one capable of challenging the dominance of IndiGo and Air India.
Mint explains what the government’s NOC actually signifies, and why these approvals are unlikely, by themselves, to change the current structure of India’s aviation market any time soon.
Does this signal the end of the IndiGo–Air India duopoly?
No. An NOC does not allow an airline to fly, sell tickets, or commence operations. It merely permits a company to begin the formal process of setting up an airline.
Air Kerala illustrates the gap between approval and execution. Operated by Zettfly Aviation Pvt. Ltd and founded by Indian-origin entrepreneurs based in the United Arab Emirates, the airline received the ministry’s NOC in mid-2024. Media reports suggested it aimed to begin regional operations in 2025.
Yet it has not inducted a single aircraft, a prerequisite even to apply for an air operator certificate (AOC) from the Directorate General of Civil Aviation (DGCA). Without an AOC, no airline can operate.
Why, then, did the announcement generate excitement?
The timing matters. The minister’s tweet came weeks after IndiGo’s operational disruption in early December, when thousands of passengers were left stranded, and fares surged across carriers. The episode revived concerns about India’s aviation market becoming a de facto duopoly, with IndiGo and Air India together controlling more than 90% of domestic capacity.
Against that backdrop, the NOC announcement was widely read as a signal that the government was encouraging competition and expanding consumer choice. However, industry experts caution against drawing such conclusions.
According to Mark D Martin, founder and chief executive of Martin Consulting, most small airlines that receive initial clearances never scale up enough to affect incumbents’ market share. Several shut down before operations stabilize.
What does an NOC allow, and how is it granted?
In India, an NOC is the initial clearance issued by the ministry to applicants seeking to start an airline. It allows companies to begin setting up basic infrastructure, such as offices and staffing, and to move ahead with further regulatory applications. It does not permit commercial flying of passengers or cargo.
In a June reply to Parliament, minister of state for civil aviation Murlidhar Mohol said NOCs are issued after assessing factors such as the applicant’s financial soundness, operational plans, and security clearances for the company and its directors. The approval is typically valid for three years from the date of issue.
What hurdles remain for these proposed airlines?
The most difficult stages lie ahead. Before applying for an AOC from the DGCA, airlines must induct at least one aircraft, either through purchase or lease. Leasing is the more common route, but it requires substantial security deposits and bank guarantees, often running into several crores of rupees. For startups, raising this capital is a major obstacle.
Aircraft manufacturers and lessors are also cautious. Many original equipment manufacturers are already struggling to meet delivery schedules for large, established carriers, making them reluctant to commit scarce capacity to untested operators.
Even after securing aircraft and meeting staffing and safety requirements, applicants must conduct proving flights before receiving final operational approval. The overall process can take more than a year.
Does securing approvals guarantee success?
No. India’s track record with regional airlines remains mixed.
StarAir, Fly91, and the government-owned Alliance Air have achieved relatively stable operations. But the sector is littered with failures, including Paramount Airways, Air Pegasus, Zoom Air, TruJet, Air Odisha and Fly Big, which ceased operations in October.
The history underscores a central reality: regulatory clearances alone do not address the structural challenges of India’s aviation market. Without deep capital, reliable aircraft access and sustained demand, most new entrants struggle to survive, regardless of how many NOCs are announced.
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