SUBJECT: INTERNATIONAL AIR LAW

AJAY PRAKASH

ID No: 2023-2MAALATM-021

Semester – 1, Year – 1

Name of topic: CIVIL AVIATION AND COMPETITION ISSUES: A CRITICAL

ANALYSIS

DRAFT PROPOSAL

INTRODUCTION:

In the present work we are trying to identify how the air transportation sector is moving towards
the monopolisation and the competition issues in air transportation sector and the legal measures
that can be taken for encouraging the competition in air transportation sector. India is expected to
overtake China and the United States as the world's third-largest air passenger market in the next
ten years, by 2030, according to the International Air Transport Association (IATA). Further, the
rising demand in the sector has pushed the number of airplanes operating in the sector. The
number of airplanes is expected to reach 1,100 planes by 2027 1.In the process of liberalisation2,
the government allowed the private sector to invest and operate in the aviation sector after 1991.
At present 75% of the domestic air transport is done by the private air transport companies. Now
India became 4th largest aviation market in the world. In the year of 2003 the entry of low-cost
carriers like Air Deccan and Spice jet significantly affected the competition in Indian aviation
sector. However, the price war between the airline companies led to losses for the airlines. As a
result, the market structure in the air transport sector is undergoing rapid changes with Mergers
and Acquisitions of air transportation companies. The changing market structure created a new
competitive dimension to the industry. These M&As are going to affect the scale of economies,
1
Aviation industry Report Aug 23, Indian Aviation Industry, INDIA BRAND EQUITY FOUNDATION, (Dec 19,
2023, 06:26 PM), https://www.ibef.org/industry/indian-aviation.
2
the removal or loosening of restrictions on something, typically an economic or political system
efficiency and productivity of airline companies. Now the market structure of air transportation
sector has changed which was earlier open many players thereby enhancing the competitiveness.
It is perceived that this may lead to anti-competitive practices on the market with some large
players dominating the market.

The aviation sector came under severe financial stress during the Covid-19 pandemic. After air
travel was suspended in March 2020, airline operators in India reported losses worth more than
Rs 19,500 crore while airports reported losses worth more than Rs 5,120 crore. However, several
airline companies were under financial stress before the pandemic affected passenger travel. For
instance, in the past 15 years, seventeen airlines have exited the market. Out of those, two
airlines, Air Odisha Aviation Pvt Ltd and Deccan Charters Pvt Ltd exited the market in 2020.
Air India has been reporting consistent losses over the past four years. All other major private
airlines in India such as Indigo and Spice Jet faced losses in 2018-19 3. At this juncture the
present work discusses about the competition issues in air transportation sector and how it affects
the industrial health of this sector. In the present work we are giving the brief overview of the
Indian air transportation sector and we are trying to identify the competitive issues in air
transportation sector if any. which are going to affect the consumers’ interest at large. Further we
are trying to explain the impact of competition issues on the consumers. Finally, the researcher
trying to explain the economic and legal impact of the anti-competitive practices on the
consumers and the steps that needs to be taken by the government for furtherance of competition
in the air transportation sector.

REASEARCH QUESTIONS:
1. What is the Importance of air transportation sector in India?
2. What are the competitions issues Indian Air transportation Sector?

HYPOTHESIS:
It is hypothesised there are competition issues in air transportation sector. The Competition issue
restricts the competition in the market and this adversely affects the consumer interest and to
increase the competition in the market there is a need of regulatory reforms to regulate these
competition issues.
3
Tanvi Vipra, State of Civil aviation Sector in India, PRS LEGIALATIVE RESEARCH, (Dec 19, 2023, 06:49 PM),
https://prsindia.org/theprsblog/state-of-the-civil-aviation-sector-in-india.
RESEARCH METHODOLOGY:
The Researcher followed the Doctrinal method for the purpose of this paper to analyze data. The
researcher is dependent on the primary data if required, secondary and empirical data available in
concerned ministry website, like Ministry of Civil Aviation, Directorate General of Civil
aviation, various books, legislative reports and other online journals and websites.

TENTATIVE CHAPTERIZATION:

The following is the chapterization of the paper:

I. Introduction
The above is the tentative introduction.
II. History of competition law and air transportation sector.
The chapter consists of competition law and air transportation sector..
III. Market Structure in Air Transportation sector.
The chapter consists of the concept of Market structure and concentration.
IV. Competition issues in Air Transportation sector.
The chapter consists of discussion about the Critical analysis of Aviation Policy.
V. Conclusions and Suggestions.

https://indiacorplaw.in/2019/10/antitrust-aviation-reviewing-indian-civil-aviation-sector.html