Competition Laws

When Dominance Fails Consumers

Harshvardhan Melanta

December 31, 2025

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In early this month (December, 2025), India’s aviation sector witnessed an unprecedented disruption that went far beyond routine operational failures. Indigo Airlines, which commands nearly 60–65% of India’s domestic aviation market, cancelled more than 4,500 flights within a matter of days¹, leaving over five lakh passengers stranded and paralysing airport operations across the country².

This was not merely an airline’s scheduling failure. The episode exposed a deeper structural vulnerability in India’s regulatory and competition framework, what happens when a single private enterprise becomes so dominant that its internal failures spill over into systemic risk.

The Regulatory Backdrop: FDTL Norms and Judicial Oversight

The crisis coincided with the implementation of revised Flight Duty Time Limitations (FDTL) regulations by the Directorate General of Civil Aviation (DGCA), the second phase for which came into force on 1^st November, 2025 (the first phase being w.e.f. 1^st July, 2025)³. These rules, aligned with international aviation safety standards, increased mandatory weekly pilot rest from 36 to 48 hours and curtailed night landings from six to two per week.⁴

Importantly, these regulations were not sudden. The issue of FDTL had been pending for several years. In April 2025, the Delhi High Court upheld the DGCA’s implementation timeline and directed airlines to submit compliance schemes within prescribed deadlines. The industry was therefore on clear notice that the revised norms were inevitable.⁵

Indigo’s inability, or unwillingness, to prepare adequately raises serious questions about regulatory compliance in a highly concentrated market.

The Indigo Meltdown: A Predictable Collapse?

The operational breakdown was swift and severe. Indigo’s on-time performance dropped from 49.5% on 1^st December, 2025⁶ to 8.5% by 4 December, 2025⁷. Flight cancellations surged from under 100 per day to over 1,000 cancellations by 5^th December, 2025⁸

In November as well, the airline cancelled 1,232 flights, of which:

• 755 were attributed to crew shortages and FDTL constraints,
• 258 to airspace or airport restrictions, and
• 92 to air traffic control issues.⁹

While Indigo acknowledged “misjudgment and planning gaps,” pilot associations alleged something more troubling. According to them, other airlines had adjusted to the FDTL regime with minimal disruption, whereas Indigo had relied for years on lean manpower planning, delayed hiring, and aggressive rostering practices¹⁰. The crisis, they argued, was not accidental but an outcome of chronic under-investment in human resources—possibly leveraged to exert pressure on regulators by creating large-scale public inconvenience.

Whether intentional or not, the episode demonstrated how the failures of one dominant airline can effectively hold an entire sector hostage

The Big Picture?

The danger here is not dominance per se, but unchecked dominance in essential services.

The Raghavan Committee (2000), which laid the foundation for India’s competition regime, emphasised that competition policy must have the positive objective of promoting consumer welfare¹¹. This philosophy is embedded in the Competition Act, 2002, whose stated purpose is to “prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets”¹²

When a single enterprise acquires overwhelming control over a service as critical as aviation, even a temporary failure can create cascading consequences—economic, social, and regulatory.

The Indigo episode is not an outlier. Similar patterns of concentration exist across key Indian markets:

• In telecommunications, two operators, Jio and Airtel, control nearly 82.1% of the market.¹³
• Only 3 companies control nearly 85% of the paint industry (Asian Paints – more than half, Berger Paints and Kansai Nerolac) , a dominance which was also challenged by new entrants like Birla Opus¹⁴
• In digital payments, PhonePe and Google Pay account for over 80–84% of UPI transaction value.¹⁵
• Only NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services Ltd.) are India’s two major depositories

These sectors are undeniably capital-intensive and technologically complex, creating high entry barriers. However, concentration at this scale undermines the spirit of a free market. When one dominant player falters, consumers have no meaningful alternatives, and the state is forced into damage-control rather than regulation. Moreover, Innovation-driven start-ups, lacking deep capital reserves, are effectively locked out, regardless of the quality of their ideas.

With regards to aviation, at a time when the Government is actively pursuing the UDAN (Ude Desh ka Aam Nagrik) scheme, aimed at creating seamless air connectivity across Tier II, Tier III, and underserved regions of India, excessive market concentration risks frustrating that objective. Connectivity-driven public policy cannot sustainably coexist with a market structure where disruption by one or two carriers can paralyse the network as a whole.¹⁶

While recent reports of new entrants such as Alhind Air and Shankh Air entering the aviation sector offer cautious optimism, time alone will tell whether the existing duopolistic structure will allow these players the operational and commercial space required to scale and survive. Without a genuinely competitive environment, entry alone cannot guarantee competition.¹⁷

Abuse of Dominance and the Limits of Reactive Enforcement

Entities with dominant market power also gain the ability to distort competitive conditions to the detriment of rivals. In 2024, the European Union initiated antitrust proceedings against Microsoft following a complaint by Slack, a rival communication app, alleging abuse of dominance through the bundling of Teams with Office 365.¹⁸

While, the Competition Commission of India (CCI) has reportedly initiated a preliminary inquiry into allegations that Indigo abused its dominant position through predatory pricing during the period of mass cancellations¹⁹. Section 4 of the Competition Act prohibits abuse of dominance and permits penalties of up to 10% of the average turnover of past 3 years.

However, such enforcement is reactive, not preventive. By the time penalties are imposed, the market distortion, and consumer harm, has already occurred.

Conclusion

The Indigo crisis reveals three fundamental regulatory failures:

First, enterprises must have realised that regulations become negotiable when the scale of disruption is large enough.

Second, market concentration cannot be reached to such a level where the failure of a single firm could destabilise an entire sector.

Third, India’s regulatory philosophy should view dominant private players also as potential sources of systemic risk requiring enhanced scrutiny.

Dominance in essential infrastructure, whether aviation, telecom, or digital payments, creates a moral hazard. When one player’s failure threatens national disruption, the government itself becomes vulnerable to regulatory capture.

Competition policy must therefore shift from being curative to pre-emptive. The European Commission’s energy sector inquiry in 2005, which combined continuous market monitoring with enforcement and legislative reform.²⁰

For meaningful reform, the CCI must move beyond complaint-driven adjudication and adopt continuous sectoral surveillance, using market studies and structural assessments to identify dangerous concentrations before they erupt into crises.

True competition law enforcement is not about punishing dominance after the damage is done, it is about ensuring that no single private failure can ever bring a public system to its knees.

1. IndiGo updates guidance for Q3 FY 2025-26, Press Release (Dec. 10, 2025), National Stock Exchange of India Archive, https://nsearchives.nseindia.com/corporate/Indigo1_10122025214356_Press_Release_10122025.pdf ↩︎
2. IndiGo crisis reveals why India’s new air safety rules are vital, Asia News Network (Dec. 26, 2025), https://asianews.network/indigo-crisis-reveals-why-indias-new-air-safety-rules-are-vital/ ↩︎
3.  IndiGo flight cancellation chaos: DGCA and civil aviation ministry launch review; normalcy by February 2026, says airlines, Times of India (Dec. 4, 2025), https://timesofindia.indiatimes.com/india/indigo-flight-chaos-dgca-and-civil-aviation-ministry-launch-review-normalcy-by-february-2026-says-airlines/articleshow/125769501.cms ↩︎
4. How new DGCA rules put human limits at the centre of air safety, The Hindu (Dec. 8, 2025), https://www.thehindu.com/sci-tech/science/how-new-dgca-rules-put-human-limits-at-the-centre-of-air-safety/article70371563.ece ↩︎
5.  Pilots’ body moves Delhi HC against DGCA’s FDTL exemptions, Hindustan Times (Dec. 16, 2025), https://www.hindustantimes.com/india-news/pilots-body-moves-delhi-hc-against-dgca-s-fdtl-exemptions-101765828354335.html ↩︎
6. Indigo not supposed to compromise on air safety, Indian Century (Dec. 22, 2025), https://www.indiancentury.in/2025/12/22/indigo-not-supposed-to-compromise-on-air-safety/ ↩︎
7. IndiGo flight disruptions: Situation to normalise by December 10-15, says CEO Pieter Elbers, The Economic Times (Dec. 5, 2025), https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/indigo-flight-disruptions-situation-to-normalise-by-december-10-15-says-ceo-pieter-elbers/articleshow/125789910.cms ↩︎
8. Ibid ↩︎
9.  DGCA probes IndiGo after over 100 flights cancelled, Outlook India (Dec. 3, 2025), https://www.outlookindia.com/national/dgca-probes-indigo-after-over-100-flights-cancelled ↩︎
10. DGCA’s inquiry committee probing IndiGo meltdown submits report, Sukalp Sharma, The Indian Express (Dec. 26, 2025), https://www.indianexpress.com/article/business/aviation/dgcas-inquiry-committee-probing-indigo-meltdown-submits-report-10440696/ ↩︎
11. Report of the High Level Committee on Competition Policy & Law (Raghavan Report) (Dec. 1999), https://the1991project.com/sites/default/files/2024-12/1999_Raghavan_Report%20of%20the%20high%20level%20Committee%20on%20Competition%20Policy%20%26%20Law.pdf ↩︎
12. The Competition Act, 2002, Act No. 12 of 2003, https://www.indiacode.nic.in/bitstream/123456789/2010/7/A2003-12.pdf ↩︎
13. Information Note to the Press (Press Release No. 141/2025), Telecom Regulatory Authority of India (Nov. 28, 2025), https://www.trai.gov.in/sites/default/files/2025-11/PR_No.141of2025_0.pdf ↩︎
14. How Birla Opus broke into India’s paints industry with scale, capital and 45,000 tinting machines, Rakshit Kumar & Yuthika Bhargava, Outlook Business (Dec. 1, 2025), https://www.outlookbusiness.com/magazine/how-birla-opus-broke-into-indias-paints-industry-with-scale-capital-and-45000-tinting-machines ↩︎
15. India delays UPI payments market share cap in relief for Walmart-backed PhonePe, Google Pay, Jaspreet Kalra, Reuters (Dec. 31, 2024), https://www.reuters.com/technology/india-delays-upi-payments-market-share-cap-relief-walmart-backed-phonepe-google-2024-12-31/ ↩︎
16. Ude Desh ka Aam Naagrik (UDAN): Ministry of Civil Aviation, GoI, https://www.civilaviation.gov.in/sites/default/files/migration/Udaan_Eng.pdf ↩︎
17. India clears new airlines in attempt to break aviation duopoly; Al Hind Air, FlyExpress, Shankh Air set for takeoff, The Economic Times (Dec. 24, 2025), https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/india-clears-new-airlines-in-attempt-to-break-aviation-duopoly-al-hind-air-flyexpress-shankh-air-set-for-takeoff-air-india-indigo/articleshow/126157108.cms ↩︎
18. Commission sends Statement of Objections to Microsoft over possibly abusive tying practices regarding Teams, European Commission Press Release (June 25, 2024), https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3446 ↩︎
19. IndiGo flight disruptions to be probed by Competition Commission of India, Arshad Khan, The New Indian Express (Dec. 18, 2025), https://www.newindianexpress.com/business/2025/Dec/18/indigo-flight-disruptions-to-be-probed-by-competition-commission-of-india ↩︎
20. Sector inquiry into energy (2005), European Commission – Competition Policy, https://competition-policy.ec.europa.eu/sectors/energy-environment/sector-inquiry-energy-2005_en ↩︎