Commercial Aviation In India

India is the world's third-largest aviation market, behind the US and China, and is the
fastest-growing. The history of Indian aviation is closely tied with that of Air India and state
control, with its roots in the 1930s.

The beginning:
Indian aviation kicked off in 1932 with the introduction of the first airline, Tata Air Services.
The airline, founded by J.R.D Tata, started as an airmail carrier within India after winning a
contract with Imperial Airways. The airline flew its inaugural flight in October 1932, flying
from Karachi to Mumbai.
The airline progressed from a small freight airline to a commercial passenger airline. By
1938, the carrier was renamed Tata Airlines and was flying domestic flights to a number of
destinations. Tata Airways also played a role in the Second World War, carrying troops and
supplies for Britain during the war.

The foundation of Air India

In 1947, following Indian independence, Tata Airways was renamed Air India, and the
government took a 49% stake in the airline. The airline began flying its first international
flights in the next year, flying from Mumbai to London on a Lockheed Constellation.
By the 1950s, India was home to a number of smaller airlines operating in different parts of
the country. Some notable airlines were Deccan Airways, based in Hyderabad, and Kalinga
Airlines, based in Kolkata. Air India remained the national carrier, flying multiple domestic
and international routes.

In 1953, the Indian government nationalized the aviation industry, taking control of all major
airlines. This resulted in the eight major airlines being merged into two airlines run by the
government. These two airlines were Air India and Indian Airlines.

Government-run airlines
The two government airlines were simplified for efficiency. Indian Airlines operated
domestic flights in India, and Air India focused on international routes. This led to a
significant streamlining of operations, allowing the government to manage these airlines.
Air India International, the new airline, was India's flag carrier and quickly became a major
international carrier. Air India became known for its superior service and profitable business
model, led by J.R.D Tata, who stayed on as Chairman of the airline post-privatization. The
airline also became of the first few to purchase the Boeing 747.

However, the 1970s were marred with war and domestic disputes, leading Air India and
Indian Airlines to struggle. Indian Airlines struggled in particular since it operated a number
of unprofitable routes and was forced to manage its ageing fleet. In the 1990s, the peak of
India's financial crisis, India reversed its stance on regulation and allowed private airlines
once again.

The birth of modern Indian aviation

By 1994, India repealed all laws regulating the formation of airlines and allowed the
introduction of scheduled private airlines. This deregulation allowed for the formation of
new airlines such as Jet Airways and ModiLuft. This laid the groundwork for the current
Indian aviation industry
Following the 1994 reforms, India saw a number of airlines crop up. Air India and Indian
Airlines continued to operate as government-run airlines. However, carriers such as Jet
Airways and Air Sahara began chipping away at the legacy airlines, trying to establish
themselves.

India's deregulation also attracted foreign players. For instance, Lufthansa invested in
ModiLuft, a joint-venture airline that failed to succeed. However, ModiLuft did go on to
become SpiceJet, a key low-cost carrier.

The aviation boom

The 2000s marked the beginning of India's aviation boom. Full-service carriers such as Air
India and Jet Airways were challenged by a slew of low-cost airlines. Low-cost airlines
drastically reduced fares, allowing millions more to fly and challenging the larger airlines.

Notable examples of low-cost airlines were IndiGo, SpiceJet, GoAir, and AirAsia India. These
airlines now occupy over 70% of the domestic market and continue growing. This explosion
of airlines and low fares has propelled India into the third-largest aviation market, requiring
thousands of new aircraft in the coming decades.
The growth of the Indian aviation market has also attracted a number of foreign airlines.
Carriers such as Emirates and Qatar Airways have become major long-haul carriers, flying to
nearly a dozen cities each and holding a significant share of the market.

Recent transformations
Air India went full circle last year following the purchase of the carrier by the Tata Group.
The carrier will be hoping for a major bounce back following years of financial difficulty.
Moreover, With Tata also behind Vistara, there have been reports of a merger in the coming
years.
While Vistara has seen strong growth, new start-ups such as Akasa Air have formed. This
airline is planning to deploy the Boeing 737 MAX this summer and seeks 18 aircraft by the
time this year is over. There will undoubtedly be plenty of healthy competition in the market
in this next chapter.