NEW DELHI: A series of crises at India’s two main airlines, Air India and IndiGo, has exposed safety and regulatory shortcomings in the world’s third-largest domestic aviation market, raising questions about whether the sector’s rapid expansion has outpaced its ability to manage growth.
The turmoil has been compounded by geopolitical shocks that have squeezed airline profits and forced carriers to reassess expansion plans. It has also highlighted the lack of competition in the market, with Air India and IndiGo together accounting for about nine in every 10 domestic airline seats.
“The last two years, 2025 and 2026, have been the darkest years for India in terms of its global reputation and credibility,” said Mark Martin of Martin Consulting.
The latest setback came earlier this month when an Air India flight travelling from Thailand’s Phuket to New Delhi plunged 300 feet mid-air, injuring 24 passengers.
The incident drew further scrutiny after reports that the captain tested positive for marijuana upon landing. Air India subsequently ordered one-time drug screening for all its pilots.
Initial findings from an investigation into the incident are expected in the coming weeks.
The episode has kept Air India under renewed scrutiny following last year’s crash of a London-bound Boeing 787 Dreamliner that killed 241 people.
An unrelated audit of Air India identified around 100 safety lapses, including seven violations requiring “urgent corrective action” and recurrent training gaps involving Boeing 787 and 777 pilots, according to a parliamentary panel report.
Indian airlines face financial losses
The safety concerns come as Indian airlines face mounting financial pressure.
Indian carriers have been affected by the closure of Pakistani airspace since the May 2025 conflict between Pakistan and India. The restrictions have forced airlines to take longer and more expensive routes.
Rising jet fuel prices linked to the war in the Middle East have added to the pressure.
Ratings agency ICRA estimates that Indian airlines will lose nearly $4 billion in the current financial year.
Air India’s losses more than doubled to $2.3 billion in the last financial year, while IndiGo has reported losses for two consecutive quarters. The financial strain is also affecting expansion plans.
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IndiGo last month shut down its wide-body operations, while Air India is reportedly considering delaying deliveries of as many as 500 aircraft.
The financial and operational pressures mark a reversal for a sector long celebrated as one of the major success stories of India’s economic expansion.
Questions over regulation
Concerns over the sector’s ability to manage rapid expansion came to the fore last year when IndiGo cancelled large numbers of flights after failing to prepare for new pilot fatigue regulations.
Industry experts said the temporary suspension of parts of the new rest rules pointed to broader regulatory shortcomings.
“The DGCA acts more like a facilitator than a regulator,” said Shakti Lumba, a former airline operations chief, referring to India’s Directorate General of Civil Aviation.
Lumba also described Air India’s safety culture as “lax”.
“At present, everyone is paying lip service to safety. By paying lip service, you do not create a safety culture,” he said.
Former Air India executive director Jitender Bhargava said the reported drug case had raised questions about management oversight. He argued that pilots would generally know if a colleague was taking drugs.
