The story of two Januaries – How IndiGo made the most of the pandemic while SpiceJet shrunk – NetworkThoughts

In January 2020, the Indian aviation industry was upbeat and tiding over the crisis which unfolded due to the folding up of Jet Airways the previous year. The aircraft operated by Jet Airways were with SpiceJet and Vistara and the industry was looking forward to a splendid summer ahead, for both Vistara and SpiceJet wanted to take on IndiGo with all their might and the sudden increase in capacity. There was one problem, a pandemic was around the corner and remained unknown as airlines mounted flights and took on planes in the fleet. The crisis which started making an appearance in November, news in December, translated to worries in February and a full blown crisis in March. 

Five years later, January 2025 in Indian aviation is very different from what it was pre-COVID. A major carrier, Go Air is history, a large regional carrier, TruJet is history; while a new carrier Akasa Air is spreading winds. The biggest change has been the folding up for four airlines into two and under the Tata fold. 

Interestingly, January 2025 saw a growth of mere 3% over January 2020 in the number of departures. This translates to a little under 100 flights a day. However, the passenger numbers are up 14% which has led to stronger load factors and firming up of fares for the airlines even as passengers fume at times. Even as Go Air disappears and Akasa Air appears, the story of Indian aviation pre and post COVID is across three pillars, the fall of SpiceJet, the rise of IndiGo and the consolidation of Tata group into aviation.

The fall of SpiceJet

SpiceJet has shrunk to one fifth of what it was in January 2020. The airline operated 16,693 departures carrying 21,24,455 domestic passengers. Cut to January this year, the airline operated only 3607 domestic departures and carried 4,65,732 passengers, a sharp drop of 79% in both departures and passengers.

Surviving might be an achievement for the airline, which could have otherwise thrived due to increased capacity, cheaper leased and ability to add passengers on the back of increased slots at key airports. 

IndiGo

The airline went into the pandemic with strength on its balance sheet, the cash reserves. Instead of delaying payments, it engaged with the lessors to ensure it builds a long term relationship which helps it in future. Five years later, not only has it gained the market share to unsurmountable levels, it carries 1.5 times more passengers now than what it did in January 2020. This comes even as its growth in departures is only 1.4 times, an indicator of the higher load factors.

On the other side of the pandemic, the IndiGo of today is very different from the IndiGo of yesterday. A dual class sub-fleet, widebody and a lot more on the way has transformed the airline.

Tata group

The comparison for Tata group is Apples to Oranges. Air India of 2020 was a mix of Air India, Air India Express and Alliance Air, the three government owned entities while Tata group had majority stake in AirAsia India and Vistara. As of January 2025, neither AirAsia India nor Vistara exist, while Alliance Air continues to be a government entity. The four airlines, if combined, have grown 11% in departures and 18% in passengers. 

Tail Note

The Indian industry is consolidating towards a duopoly, with the two airline groups now claiming 90.9% of the domestic market. The international market is similar amongst Indian carriers, though there remains a large competition on the international side. 

As we move ahead towards 2025, February will report some above normal numbers due to the traffic which the Maha Kumbh catered to. The market shares will move because SpiceJet and Air India had a substantial percentage of their flights to Prayagraj. The market dynamics are changing faster, who gains the market share at whose expense and who makes the most of the growing market are the two parameters which I will be closely watching in 2025.

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