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Senior aviation journalist Ashwini Phadnis traced the evolution of India’s airline industry from its beginnings under J.R.D. Tata to today’s record-breaking aircraft orders, highlighting how regulation, financing structures and operating economics have shaped one of the world’s fastest-growing aviation markets.
Speaking to students, Phadnis began with the launch of Tata Air Limited in 1932 and the sector’s nationalization in 1953 under the Air Corporations Act. The move created two state-owned monopolies—Air India for international routes and Indian Airlines for domestic services—while barring private participation for four decades. Competition returned only after liberalization under the 1993 Air Operations Act, laying the groundwork for the modern airline industry.
Phadnis outlined the financial mechanics that underpin airline operations, including sale-and-leaseback arrangements that allow carriers to avoid large capital outlays. Instead of paying about $30 million upfront for an aircraft, airlines typically opt for monthly lease payments of roughly $275,000 to $325,000. He also explained ACMI leasing—Aircraft, Crew, Maintenance and Insurance—a high-cost, short-term option used to meet sudden capacity shortages.
Airfare economics, he said, are driven by bucket-based pricing systems, running from A to Z, and algorithmic models that adjust fares based on demand, timing and seasonality. Case studies illustrated strategic bets that reshaped the market, including Jet Airways’ early edge from deploying newer Boeing 737-400 aircraft and IndiGo’s 2006 decision to place a startup order for 100 planes. He also pointed to failed mergers—Air India–Indian Airlines, Jet–Sahara and Kingfisher–Air Deccan—as examples of integration risks in a capital-intensive industry.
The discussion also examined the role of the state, with Phadnis analyzing Air India’s return to Tata Sons through privatization in 2021 after decades of losses under government ownership. He touched on technical and legal frameworks that govern the sector, including the difference between wide-body and narrow-body aircraft and the Cape Town Convention, which sets global rules for aircraft repossession.