A Slice of the Sky: The Great Indian Aviation Battleground

When the Tata group acquired ailing national carrier Air India last year, it was a seminal moment not just for privatisation in India but also for the Indian aviation industry. Here was one of the country’s largest and storied business groups acquiring an airline that would, together with the existing airlines Tata owns—Vistara and AirAsia India—make it a formidable force in the Indian aviation market. The acquisition also paves the way for a bruising battle for market share between the Tata group and India’s biggest airline company, IndiGo, at a time when the Indian skies are set to witness the entry of at least one new player, Akasa Air, funded by star investor Rakesh Jhunjhunwala, and the revival of the fallen Jet Airways, which is now controlled by the Kalrock-Jalan consortium.

By all accounts, it’s going to be a most interesting contest, with IndiGo—which has a staggering 51 per cent market share—fighting to retain its stranglehold over the Indian aviation sector and Tata—counting low-cost carrier (LCC) Air India Express—now owning four airline brands: two full-service carriers and two LCCs, with a combined market share of a shade under 27 per cent. And that’s exactly why IndiGo has also armed itself with the return of Promoter Rahul Bhatia as Managing Director to helm the company at this crucial juncture and get it ‘future ready’. In our cover story, Manish Pant takes a close look at the emerging scenarios in the Indian aviation sector at a time when the Covid-19 pandemic is ebbing, air travel is back sharply, and Tier II and III cities are also showing sharp growth in passenger numbers. On the flip side, there is the big challenge of runaway fuel prices. Meanwhile, domestic air traffic improved sequentially to 7.69 million passengers in February 2022, against 6.41 million passengers in January, indicating that the battleground is now ready for IndiGo, Tata and the rest of the players. As IndiGo CEO Ronojoy Dutta tells us, there is a huge market waiting to be tapped and there’s potential and space for everyone. Vistara’s CEO Vinod Kannan echoes this sentiment when he says that the scale of the Indian aviation market is “second to none”.

Elsewhere in this issue, Krishna Gopalan dives into yet another battle playing out, this time in India’s retail sector, with Mukesh Ambani-owned Reliance taking charge of over 800 stores earlier run by Kishore Biyani’s Future Retail, as the latter failed to pay up lease rentals. In doing so, Ambani has caught the mighty Amazon totally off guard, even as the Jeff Bezos-founded megacorp is locked in a bitter face-off with Biyani over the latter’s deal to sell Future to Ambani. This intense battle for control of Future will be a determining factor in India’s fast-growing retail story. Talking of retail, I would also urge you to read Arnab Dutta’s interview with Hindustan Unilever Ltd (HUL) boss Sanjiv Mehta, where he talks about the competitive landscape in the fast-moving consumer goods sector, and the importance of HUL in the Unilever ecosystem.