Why This Is the Right Time to Start an Airline in India (2025-26)
Government Push • Market Opportunity • Regulatory Readiness
By Adv. Sarosh Damania, Aviation Lawyer
India’s aviation sector is at a historic inflection point. Clear policy signals from the Government of India, recent approvals granted to new airlines, repeated parliamentary statements by the Civil Aviation Minister, and persistent market concentration together make one thing evident:
This is the right time to start an airline in India — provided it is done with serious capital, strong governance, and airtight regulatory compliance.
This is not speculation. It is a policy-backed opportunity, emerging from both necessity and reform.
Government of India Wants More Airlines — The Policy Signal Is Unmistakable
Starting an airline in India is harder than obtaining a taxi licence. It is one of the most regulated commercial activities in the country, requiring permissions across safety, security, finance, foreign affairs, and infrastructure.
An airline must obtain approvals from multiple authorities, including:
- Ministry of Civil Aviation
- Directorate General of Civil Aviation (DGCA)
- Bureau of Civil Aviation Security (BCAS)
- Ministry of Home Affairs
- Ministry of Finance
- Ministry of External Affairs
- Airports Authority of India
Despite this complexity, the Central Government has recently granted multiple No Objection Certificates (NOCs) to new airlines within a short span — an unusual and deliberate move in Indian aviation history.
Further, the Civil Aviation Minister has stated on the floor of Parliament that India needs more airlines to reduce over-dependence on a handful of dominant carriers, ensure sectoral resilience, and give passengers genuine choice.
This is a direct invitation to credible new entrants.
Existing Domestic Airlines in India
For factual clarity and search relevance, India’s currently operating domestic airlines include:
- IndiGo – India’s largest airline by market share
- Air India – Full-service carrier
- Air India Express – Low-cost arm of Air India Group
- AIX Connect – Integrated into Air India Express
- SpiceJet
- Akasa Air
- Alliance Air
- Fly91
❌ Vistara – merged into Air India
❌ Go First – defunct
Despite this list, over 90% of India’s domestic capacity is controlled by just two airline groups — a concentration now openly acknowledged as a systemic risk.
Airlines That Shut Down in India — And the Opportunity They Created
India’s aviation history shows that airlines have failed not because demand was lacking, but because capital discipline and regulatory maturity were missing.
Major Indian airlines that shut down include:
- Jet Airways
- Kingfisher Airlines
- Go First
- Air Deccan
- Sahara Airlines
- Paramount Airways
- ModiLuft
- Damania Airways
- East West Airlines
What These Shutdowns Left Behind
- Underserved domestic and regional routes
- Persistent shortage of seat capacity
- A large pool of trained pilots, engineers, and cabin crew
- Aircraft available at competitive lease rates
- Stronger, more experienced regulators
INDIA DOES NOT SUFFER FROM TOO MANY AIRLINES. IT SUFFERS FROM TOO FEW SUSTAINABLE ONES.
Why 2025–26 Is Fundamentally Different
Earlier airline failures were caused by:
- Weak balance sheets
- Poor governance
- Aggressive expansion
- Immature regulatory frameworks
Today, the ecosystem has evolved:
- Robust DGCA oversight and digital audits
- Clear FDI and ownership rules
- Modern airport and ATC infrastructure
- Mature aircraft leasing environment
- Regional connectivity through UDAN
The regulatory system is strict, but predictable — ideal for serious, compliant promoters.
How Long Does It Take to Start an Airline in India?
Starting an airline typically requires 18–36 months, involving:
- Company incorporation
- Government NOC from MoCA
- Air Operator Certificate (AOC) from DGCA
- BCAS security clearance
- Airport slots and infrastructure
- Aircraft acquisition and registration
- Crew licensing and training
The difficulty is intentional — aviation is treated as national infrastructure, not a casual business.
Why This Is the Right Time to Start an Airline in India
- Passenger demand continues to outpace capacity
- Tier-2 and Tier-3 routes remain underserved
- Government policy actively supports new entrants
- Market concentration risk is being addressed
- Regulatory clarity has never been stronger
The Government’s message is clear:
India wants more airlines — but only credible, compliant, and well-funded ones.
How Sarosh Damania & Co. Can Help You Set Up an Airline
Sarosh Damania & Co., with deep expertise in aviation law and airline regulation, assists promoters with end-to-end legal and regulatory setup of airlines in India, including:
- Airline structuring and incorporation
- FDI, ownership & effective control (OEC) advisory
- Government NOC applications
- DGCA Air Operator Certificate (AOC) strategy and documentation
- BCAS security clearances
- Aircraft acquisition, leasing, and registration
- Regulatory liaison with aviation authorities
- Ongoing compliance post-launch
Setting up an airline is not a paperwork exercise — it is a high-stakes regulatory journey where early legal strategy determines success or failure.
Conclusion
The Indian sky is open again — but only for those prepared to do it right.
For serious promoters with capital, governance, and long-term vision, this is the right time to start an airline in India.
Frequently Asked Questions (FAQs)
1. How much capital is required to start an airline in India?
The capital requirement varies based on the type of airline (scheduled vs non-scheduled) and fleet size. A scheduled domestic airline typically requires a minimum of ₹50-100 crores as initial investment, with access to additional funding for operations, fleet acquisition, and regulatory compliance.
2. What is the process to get an Air Operator Certificate (AOC) in India?
The AOC process involves multiple phases including submission of application to DGCA, documentation review, operational inspection, demonstration flights, and final certification. It typically takes 12-18 months after receiving the government NOC.
3. Can foreign investors start an airline in India?
Yes, FDI up to 100% is permitted in scheduled and non-scheduled air transport services. However, the airline must be substantially owned and effectively controlled by Indian nationals as per Indian regulations.
4. Which routes are underserved in India for new airlines?
Tier-2 and Tier-3 city connectivity remains underserved. Routes under the UDAN (Ude Desh Ka Aam Nagrik) scheme offer particular opportunities for regional connectivity with government support.
5. What is the difference between scheduled and non-scheduled airline operations?
Scheduled operations follow a published timetable and require higher capital and regulatory compliance. Non-scheduled operations (charter flights) have relatively lower entry barriers but cannot operate regular commercial routes.
Advocate Sarosh Damania is the founder of Sarosh Damania & Co., a premier law firm based in Mumbai, recognized for its exceptional legal services to corporations, individuals, and international clients worldwide. With a rich blend of experience and expertise, Adv. Damania and his team specialize in a wide array of legal disciplines, including Civil Law, Criminal Law, Aviation Law, Arbitration, Consumer Law, RERA, Company Law, Succession Law, Wills, Intellectual Property Law, Property Law, Housing Society Law, Debt Recovery, and Banking Law.
