India's fast-growing aviation market is poised for potential new entrants, with the Ministry of Civil Aviation granting No Objection Certificates (NOCs) to three aspiring carriers: Shankh Air, Al Hind Air, and FlyExpress. Union Civil Aviation Minister Ram Mohan Naidu Kinjarapu announced the development on social media platform X, revealing that he had met with the teams of these airlines over the past week. While Shankh Air (based in Uttar Pradesh) had already received its NOC earlier and is expected to commence operations as early as 2026, Al Hind Air (promoted by Kerala-based Alhind Group) and FlyExpress (backed by a Hyderabad-based courier and cargo company) were granted their NOCs this week.

The move comes amid heightened concerns over market concentration following recent operational disruptions at IndiGo, India's dominant low-cost carrier, which highlighted the risks of over-reliance on a few major players. The government has emphasized its commitment to encouraging more airlines to enhance regional connectivity and competition in one of the world's fastest-growing aviation markets. However, industry experts caution that securing an NOC is merely the first step in a long and arduous process. Airlines must still obtain an Air Operator Certificate (AOC) from the Directorate General of Civil Aviation (DGCA), involving rigorous safety audits, operational preparations, and aircraft leasing arrangements.

An aviation expert and former CFO of a private airlines in a recent discussion on a TV channel, highlighted the formidable challenges new carriers face. The aviation expert noted that since the liberalization of India's aviation sector, approximately 18 airlines have shut down, citing intense competition, high operational costs, and regulatory hurdles as primary reasons. He pointed to the lingering impact of the Go First (formerly GoAir) insolvency, which has made aircraft lessors wary of the Indian market despite India's adoption of the Cape Town Convention.

The former CFO concurred, describing India's aviation landscape as "not set up for corporate success." He stressed the need for greater predictability in both inflows and outflows, including bringing Aviation Turbine Fuel (ATF) under GST for uniformity and implementing mechanisms to stabilize dollar-linked expenses. He described the path ahead for new airlines as "very rough," urging them to brace for challenges while wishing them success in disrupting the current duopoly.

Present and retired veterans in aviation industry emphasized structural issues plaguing the industry. ATF accounts for a significant portion of costs and is subject to varying state taxes, often exceeding 30-35% in some regions, with no uniform GST treatment. Additional levies such as User Development Fees (UDF), Passenger Service Fees (PSF), and GST further erode margins, leaving airlines with less than 40% of ticket revenue to cover expenses. Leasing costs, denominated in US dollars amid a rupee hovering above 90, add to the unpredictability of cash outflows, while revenues remain highly price-sensitive due to competition from railways and other low-cost options.

Experts also called for proactive government support, such as tax holidays for new entrants, incentives to attract foreign investment and expertise, and targeted reforms to encourage regional connectivity under schemes like UDAN (Ude Desh ka Aam Nagrik). While UDAN has been well-intentioned, representatives of private airlines believe it has achieved only a fraction of its potential without addressing deeper structural issues.

The discussion also touched on broader sector challenges, including the high cost of pilot training in India, which limits the supply of qualified personnel. A veteran aviation instructor highlighted the need for more government-backed flying academies, similar to the Indira Gandhi Rashtriya Uran Akademi, to produce the thousands of additional pilots required in the coming years as the industry expands and older pilots retire.

As India aspires to become a global aviation powerhouse, the entry of these new players could mark a turning point—if they can navigate the industry's notorious pitfalls. Industry observers agree that meaningful reforms in taxation, leasing, and regulatory predictability are essential to prevent the tally of failed carriers from rising further and to ensure sustainable growth for all stakeholders.