Introduction 

December 2025 witnessed the Indigo’s cancellation of thousands of flights stranded hundreds of passengers on airports and exposing the fragility of Indian aviation market dominated by a single carrier holding over 65% share. This operational crisis triggered a twin regulatory response spotlighting the tools available to address market concentration. First, the Competition Commission of India(hereinafter “CCI”) took the sou motu cognizance to examine potential violations of Section 4 of the Competition Act, 2002 (hereinafter “act”), which prohibits abuse of dominant position. Also, concurrently, the Ministry of Civil Aviation, in a clear policy move granted No-Objection Certificates(NOCs) to two new airlines by explicitly stating the aim to be “encouraging more competition”. This presents a critical junction for India’s competition ecosystem: one path employs ex post legal scrutiny against the dominant incumbent while the other pursues ex ante market restructuring. This article interrogates whether these distinct mechanisms, that is, the legal probe under the competition act and policy push for new entry, are individually adequate? Or whether the crisis reveals a deeper regulatory gap in ensuring resilience within essential hyper-concentrated infrastructure.

The Limits of Ex-Post Antitrust - The CCI's Uphill Battle

The CCI faces a significant legal hurdle in establishing that Indigo’s mass cancellation constitutes an abuse of dominant position under Section 4 of the act. While the CCI has initiated an inquiry, noting that the airline’s 65% market share and the widespread consumer harm, proving a violation requires more than demonstrating disruption.

The core issue appears to be an internal operational failure, specifically the poor planning and delays in adapting to new Flight Duty Time Limitation(FDTL) norms. The airline reportedly had ample time to prepare for the regulations, but instead struggled to align crew schedules, thus leading to a cascading series of cancellations. To qualify as an abuse under Section 4(2) of the act this conduct must be shown as either exploitative (e.g., imposing unfair prices) or exclusionary (e.g., denying market access to rivals). The CCI must prove that the cancellations were a strategic market act and not mere mismanagement to prove a violation under the statute.

Critically, the Supreme Court has mandated that an effects based analysis is required in such cases. CCI must satisfy itself that the conduct caused or was likely to cause an “Appreciable Adverse Effect on Competition(AAEC), focusing on harm to the competitive process itself, such as foreclosing the market to rivals, rather than just harm to consumers. While indeed the crisis mentioned caused severe consumer distress and market-wide instability which includes fare surges and stranded passengers, this operational harm may not neatly map onto the stringent legal AAEC test, and this difficulty underscores the inherent bluntness of ex post antitrust tools in proactively ensuring the operational resilience of systemically dominant firms whose internal failures can paralyse an entire market.

The Promise and Peril of Ex-Ante Entry

In December 2025 itself, the government also gave the green flag to 2 new airlines to start operating. The Ministry of Civil Aviation’s stated goal in granting No Objection Certificates(NOCs) to Al Hind and Flyexpress is explicit, that is to encourage more competition in a domestic market where a duopoly of Indigo and Air India controls approximately 90% of passenger traffic. However, this policy response is an indirect one and a slow corrective measure carrying deep-seated limitations, and this is because an NOC is merely the first formal step in a long regulatory process, requiring subsequent, more rigorous clearances before any aircraft can fly. The new entrants themselves are small and fledgling entities whose business models are closely linked to the government’s Ude Desh Ka Aam Naagrik(UDAN) regional connectivity scheme. By focusing on underserved regional routes with subsidies, they are designed to plug connectivity gaps rather than directly challenge the established duopoly on the dense and lucrative trunk routes that define market power.

And the most Prohibitive barrier is capital. As noted by aviation experts, an estimated requirement of at least Rs. 3,000 crore to fund a viable airline, a threshold that is far beyond what many promoters anticipate. This level of high-cost environment, combined with a price-sensitive market, has made India a “graveyard of airlines” as evidenced by the high-profile collapses of Jet Airways, Go first etc. The structural challenges right now are so severe that the Federation of Indian Pilots has publicly stated that granting NOCs to undercapitalized players will not weaken the existing duopoly, as on an average, the lifespan of a regional airline in India is just 3 to 7 years. Therefore, while the ex-ante policy intent to inject competition through granting NOCs to more airlines is clear, it at best functions as an uncertain long-term gamble that does little to address the immediate systemic risk of over-dependence on some dominant players as revealed by the IndiGo crisis.

The Gap and The Need for an Integrated Approach

As established, the CCI’s ex post scrutiny under Section 4 of the act faces the high legal hurdle of proving “abuse of dominance” for what was likely operational negligence. Simultaneously, the government’s ex ante policy of encouraging new airlines is a slow, uncertain solution that fails to address the immediate vulnerability of a market where a single carrier controls over 65% share and holds monopoly on 514 routes. This twin response reveals a critical gap: India lacks a framework that holds a systemically important market player accountable for maintaining operational resilience. 

When an entity of this scale fails, the damage resultant transcends consumer inconvenience; it paralyses a critical national infrastructure and also triggers a market-wide fare surges and exposing the economy to systemic risk. This presents a dilemma where the harm is clearly competition-related, causing an appreciable adverse effect on market stability and choice, yet may not neatly fit in the traditional legal tests for abuse. Forces a critical question – in essential, hyper-concentrated sectors like aviation, does a dominant firm’s “special responsibility” extend to safeguarding the market itself from its own operational collapse?

Building a "Resilience Doctrine": Lessons from Global Frameworks

Bridging this gap requires moving beyond the ex ante/ex post binary to a proactive, integrated strategy, this being a “Resilience Doctrine” for Systemically Important National Infrastructure(SINI). This doctrine would not replace sectoral safety regulation but layer on a competition and stability mandate that we have currently. Its principles can be drawn from established global concepts:

1. The “Special Responsibility” of Dominance: Under EU competition law (Article 102 TFEU), a dominant firm has a special responsibility not to distort competition. This principle can be interpreted to mean that with immense market power comes a duty to prevent one’s internal failures from causing external market catastrophe.

2. Designation of systemic importance: The United States has moved to identify “Systemically Important Critical Infrastructure” (SICI) and “Systemically Important Entities”(SIE) whose disruption would cause cascading national harm. Crucially, this designation is not punitive but acknowledges a unique status and attaches enhances responsibilities for resilience and contingency planning.

3. Precedent in Financial and Digital Regulation: India itself is not new to this logic, the Reserve Bank of India designate Domestic Systemically Important Banks(D-SIBs), requiring them to hold higher capital buffers to protect financial stability. Similarly, the proposed Digital competition bill seeks to regulate “Systemically Significant Digital Enterprises”(SSDEs) with ex ante conduct rules. Aviation, being an essential infrastructure, warrants a similar sector-tailored approach. 

   
   

   Towards an Integrated Resilience Doctrine for Aviation

A resilience doctrine for aviation would integrate competition policy with proactive sectoral governance through a two-pillared approach:

1. Parliament should enact a framework to formally designate Systemically Important National Infrastructure (SINI) entities in aviation (and other essential sectors like telecom). The criteria should include market share, network criticality and national economic impact of a potential operational collapse. 

2. A SINI designation would entail explicit statutory duties:

3. Mandatory Resilience Planning – Requirements for robust, regulated, validated business continuity and contingency plans that go beyond safety to ensure market continuity.

4. Enhanced Supervision – The sectoral regulator (DGCA) must be empowered and insulated to impartially enforce these standards, ensuring that a dominant player’s operational preparedness is scrutinised with the same rigour as its financial or safety metrics. 

   
   

Therefore, this crisis of operational meltdown reveals a regulatory void, and an integrated “Resilience Doctrine” is imperative to impose a duty of operational care on systemically dominant firms, marking a necessary paradigm shift required in competition policy.

Conclusion

The IndiGo crisis is a symptom of a deeper policy gap in regulating hyper-concentrated, essential markets presently in India, the current toolkit of reactive antitrust probes and slow market restructuring is inadequate for ensuring systemic resilience. Thus, a coherent response requires that an integrated “Resilience Doctrine” be established in place. The Competition Commission of India also must evolve its interpretation of “abuse of dominance” under Section 4 to effectively address such reckless negligence by a systemically important firm that have potential to destabilise the market. Concurrently, the sectoral policy managed by the DGCA and the Ministry must actively govern market structure through measures like transparent slot allocation and enforced contingency planning. This case presents a crucial test – whether India’s competition ecosystem can mature from punishing anti-competitive conduct to proactively safeguarding the continuity of its crucial infrastructure.

About the Author

Rohitash Singh Yadav is a IInd year B.B.A. LL.B. (Hons.) student at National Law University, Jodhpur. He is deeply interested in competition law and mergers and acquisitions.