Speed, Cost-Efficiency, and Reliability: The Allure of Air Travel

Air travel remains unrivalled as the preferred mode of long-distance transportation globally, with 4.7 billion passenger trips logged in 2023, according to the International Air Transport Association (IATA). The allure lies in its unique combination of speed, cost-efficiency, service, and relative punctuality—a blend that has captivated the modern traveller. However, there’s hardly any regular flyer who hasn’t encountered the occasional chaos caused by long flight delays, cancellations, diversions, bad service, or, worse, emergency landings that leave them stranded in a foreign land for days together. For instance, Mr. EAS Sarma, an 83-year-old former secretary to the Union government, experienced two harrowing instances while travelling with his wife, 77, in recent months.

Two Harrowing Experiences: The Struggle to Book Alternative Flights

In the first instance, IndiGo Airlines abruptly cancelled its Salem-Bengaluru flight without prior notice, forcing the couple to scramble to book an alternative flight with Alliance Air and Air India Express, incurring additional costs and uncertainty. In a second incident, Alliance Air cancelled a Salem-Bengaluru flight after having issued boarding passes for it. The Sarmas had to hire a taxi at an exorbitant Rs11,800 to reach Bengaluru for a connecting flight to Visakhapatnam.

Flawed Policy and Lack of Competition

Mr. Sarma highlights the government’s push to set up airports at multiple locations in the guise of providing connectivity. However, he argues that this has resulted in ‘far too many airports’ served by very few airlines. This lack of competition, he contends, has birthed a “regressive cartel of private airline companies,” allowing them to exploit passengers with impunity. The directorate general of civil aviation (DGCA) has a passenger charter, but it is not adequately implemented, leading to a lack of transparency in refunds, compensation, and penalties imposed on airlines.

Compensation and Refunds: A Gaping Hole

The DGCA and the ministry of consumer affairs, which operates the national consumer helpline (NCH), fail to publish comprehensive data on refunds, compensation, or penalties imposed on airlines. The compensation itself is not easily quantifiable, as it is in the form of alternative flights, flight vouchers, hotel stays, etc. Media reports often publish fragmented compensation numbers, which are unclear and inconsistent.

Airlines’ Compensation Practices

A Moneycontrol article claimed that airlines paid Rs24.86 lakh for cancellations affecting 18,818 passengers in February 2025. However, IndiGo paid a mere Rs18,000 in compensation from January 2022 to September 2024, despite 25,500 reported cancellations. A LocalCircles survey revealed that 61% of passengers affected by cancellations in the past year received no compensation.

Refund Process: A Systemic Issue

Mr. Sarma alleges that airlines strategically hold onto flight booking payments, using them as “interest-free working capital at the cost of passengers.” He believes that an independent audit would reveal that the money runs into several thousand crore rupees annually. This practice mirrors a broader issue in India’s digital economy, where delayed refunds are common across sectors, often leaving consumers financially strained.

A Global Perspective: India’s Aviation Industry

Despite many challenges, India’s aviation sector is a global powerhouse, ranking as the third-largest domestic market, with rapid growth. IndiGo commands a 60% market share, and sustained profitability. However, the Tatas, with a 10%-12% market share, are navigating a complex transition, merging Vistara’s premium niche with a revamped Air India.

Comparing India to Global Airlines

Data suggests that India is no better or worse than global airlines when it comes to delays, cancellations, and service delivery, barring a few notably excellent carriers, such as Singapore Airlines, Emirates, and Qatar Airways. TravelPerk’s 2024 data highlights India’s international flights as a bright spot, with a cancellation rate of just 1.1%.

Domestic Travel: Policy Missteps and Challenges

Domestic travel remains plagued by policy missteps, including high operational costs, financial mismanagement, and regulatory uncertainty. Historically, India has granted licences to industrialists enamoured by aviation’s glamour but lacking expertise or deep pockets, leading to financial mismanagement.

A Need for Systemic Changes

The aviation industry demands stable regulatory policies, reduced taxes on aviation turbine fuel, and recognition of its thin margins and external vulnerabilities. Only then can competition flourish, refocusing the industry on service delivery and customer satisfaction. Until these systemic issues are addressed, the skies will remain a realm of convenience and chaos for India’s travellers, with consumer satisfaction, service delivery, and compensation taking a back-seat.

Statistics and Figures

Conclusion

India’s aviation industry faces a complex challenge. While it has the potential to contribute significantly to the country’s GDP, it requires stable regulatory policies, reduced taxes, and recognition of its thin margins and external vulnerabilities. The current system, with its lack of transparency, inconsistent compensation, and delayed refunds, is causing frustration among passengers. It is essential to address these systemic issues to ensure that the industry flourishes and provides better service to its customers.