It sounds both mysterious, and mystifying. Here is a company that controls more than 60 per cent of the domestic market share. There are agonised postings on social media of how it charges sky-high rates for some simple services, possibly due to its near-monopoly status. How can such a company incur huge quarterly losses regularly? Yes, we are talking about IndiGo, “India’s largest, and most preferred passenger airline, and among the fastest-growing airlines in the world.” In Q2-FY26 (July-September), it incurred a net loss of more than Rs2,500 crore, which was more than two-and-a-half time the loss figure (just under Rs1,000 crore) in Q2-FY25.
Isn’t this strange? What is, perhaps, more unpalatable is that the airline earned a net profit of more than Rs2,000 crore in the first quarter (April-June 2025), which was lower than the profit figure (more than Rs2,700 crore) in the same period the previous year. Profits are punctuated with losses. Each quarter seems to come with a different narrative. Obviously, it seems odd that the largest local airline, which claims to be one of the fastest growing in the world, goes through financial air pockets, and has a bumpy ride.
One of the reasons may be the difference between being a local monopoly, or a part of duopoly, yet being forced to face intense global competition. In the domestic market, IndiGo is the ‘King of Air Times,’ and can charge rates that may displease some customers, and get away with it. It earns huge profits from the local lucrative routes. But the moment it competes on global routes, and against top global airlines which fly to the top destinations across the world, such as London, Frankfurt, New York, Dubai, and Singapore, IndiGo runs into roadblocks, and obstacles of various kinds.
IndiGo can claim that technically speaking it is neither a part of duopoly, or oligopoly. There are local competitors like Akasa Airlines, which is not doing too badly, even though it has a small market share, but is growing its wings in a slow and systematic manner. There is SpiceJet, about which the less we say the better it is. But in terms of market share, number of aircraft, and routes, IndiGo is a duopoly player, at least in the Indian market.
Another factor that is ascribed to the airline’s loss, or maybe an excuse of sorts, is that since it operates globally, it depends on foreign exchange transactions. Thus, it incurs foreign currency losses. In Q2-FY26, this factor dragged the profits down because the net profit excluding foreign exchange was a tad above Rs100 crore. But then, in Q2-FY25, it still incurred a huge loss of over Rs750 crore after excluding the ‘foreign’ factor. We understand that despite the forex hedging, which gained more than Rs200 crore in Q2-FY26, the global aviation sector is a complicated and complex market.
But this is not enough to explain or justify the huge losses in several quarters, coupled with huge profits in others. Let us examine the duopolies in other sectors in the country. Telecom is a clear example. Although there are four mobile operators, Bharti Airtel, and Reliance Jio dominate with nearly 90 per cent or so of the consumer space. The state-owned Bharat Sanchar Nigam is a marginal player, and Vodafone-Idea is grappling with dues, and the spectre of bankruptcy. The performances of Airtel and Jio may give us an idea of how lucrative it is to be a member of an oligopoly in India.
For the quarter ended September 30, 2025, Airtel declared a net profit of just under Rs7,000 crore, and Jio earned a figure that was just above Rs7,000 crore. These figures are not something to be sneezed at, and they indicate the reality of dominating a market. Both the Telcos still offer the cheapest data rates in the world. But because they each have 400-500 million customers, who are de facto captive ones, even an increase of five or 50 paise in data charges leads to enormous increases in revenue, and profits.
There is another oligopoly which operates in the Indian marketplace, and which is huge. Welcome to e-commerce mart. It is dominated by international players like Amazon, which entered India more than a decade ago, and local ones like Flipkart which, incidentally, was acquired by the American retail giant, Walmart. According to media reports, the annual operating revenue of Amazon Seller Services, which is the largest entity in the Amazon’s universe in India, was just over Rs30,000 crore in 2024-25. It has grown for the past 12 years, and showed an uptrend of 19 per cent last year.
For the first time in over a decade, it earned an operational profit, with a positive EBIDTA of nearly Rs2,800 crore. Net loss slumped by nearly 90 per cent to under Rs400 crore during the year, which hints that the company is likely to make huge profits in the next few years. This is evident from the cash flows, which grew seven-fold to almost Rs5,000 crore in 2024-25, compared to the previous year. What is critical is that expenses grew by a mere six per cent, “significantly lower than the revenue growth, indicating successful cost-saving strategies, including a reduction in employee benefits.”
In e-commerce, unlike telecom, the major players are on the way to earning profits, which are likely to be consistent in the future. Unlike the aviation sector, telecom shows the power of an oligopolist player, which may replicate in the e-commerce segment. Both telecom and e-commerce are located geographically, and comfortably within the ensconce of the Indian market. They do not need to compete with the foreign players, who are based elsewhere. Airline is a different business, and a duopoly status locally, and competitive one globally, does not guarantee similar revenue growth, and profitability.
Maybe it is stark and speculative but the reality in Indian aviation seems to be that it is somehow cursed. The only successful airline in terms of decades-long survival is Air India, which was launched by the late and legendary JRD Tata almost 100 years ago. Since then, despite its topsy-turvy, and highly uncomfortable existence, including as a state-owned entity, no other airline has existed for such a long time. Now, it is back in the Tata’s fold, and is taking a new flight to become profitable and popular again. It is too early to say.
However, the events in the last three decades are a revelation. Since the 1990s, when aviation was opened again for the private sector, a plethora of airlines were launched, and crashed. Start with the East West Airlines, whose CEO was murdered in broad daylight by a mafia gunman. Go to Damania Airways, which was taken over by Jet Airways, which after being one of the most profitable and successful airlines for more than two decades, collapsed in 2018, was declared bankrupt, sold off, and went out of existence. Of course, how can one forget the flamboyant ‘King of Good Times,’ as well the ‘Prince of Dreamy Flights,’ Vijay Malia, and Kingfisher. He emerged as a willful defaulter of bank loans, and flew out of the country. Sahara, and Air Deccan became takeover targets. Possibly, IndiGo’s curse is similar, probably, it will break it soon.
The author has worked for leading media houses, authored two books, and is now Executive Director, C Voter Foundation