Indian Civil Aviation Industry: A Challenge to the Emerging Regulatory and Competition Experiment

The decade of the 90s has seen a paradigm shift in the approach to economic management in India. There has been a greater recognition of the value and significance in the use of markets and the market friendly processes in the economy (Anant & Sundar 2004). It is also perceived that the markets were not competitive due externalities, economies of scale and scope, imperfect and asymmetric information, and imperfect competition. These factors lead to large scale market manipulation that ultimately lead to market distortion where the
business and the consumers where the ultimate losers.

The objective of this paper is to address the existing practices and issues relating to the airline regulation and the framework; examining the anti –trust practices in the sector; and finally propose the role of economic regulator and competition authority addressing these issues.

The study proposes to examine the economics of airline industry, contemporary policies, laws and procedures as available in the existing literature for other countries especially in the developing countries. Attempt will also be made in appraising the existing Civil Aviation Ministry guidelines and procedures.

On the basis of this, the study shall formulate an indicative guideline for the sector in terms of probable issues that shall lead to develop the industry and also the practices that may be detrimental to the industry s being and becoming. The study shall highlight the institutional mechanism to deal with these contentious issues.