Air India disinvestment: How many airlines can the Indian market support?

Indian civil aviation market resembles a vegetable market and both have similar ailments

The talk of privatising Air India brings up an old question about India’s airline business: how many airlines can the Indian market support? Or, more accurately, how many airlines can a route support?

The same question can be asked of the global aviation business also. That is why we have bilateral agreements in aviation to limit market access.

Few people realise it but the fact is that, in economic terms, an airline is exactly like a vegetable seller because both sell perishables. In fact, if anything, an airline is worse off. Vegetables can keep for several days. But the value of an