Former Civil Aviation Minister Praful Patel has issued a strong warning against "fly-by-night" operators entering India's aviation sector, arguing that only established, high-capital players possess the financial strength to navigate the industry's demanding requirements. Speaking to PTI, the 68-year-old Rajya Sabha member emphasized the critical need for long-term commitment in what he described as a "tough, capital-intensive" business environment.

New Airline Approvals Spark Concerns

Patel's remarks gain particular significance as the Civil Aviation Ministry recently approved three new carriers to begin operations in 2026. The newly licensed airlines and their operational timeline are outlined below:

The former minister, who served from 2004-11 under the Congress-led UPA government, expressed skepticism about the long-term viability of these new entrants. "Some new airlines have been given licenses, but I don't think they are long-term players," he noted, highlighting concerns about their ability to withstand the sector's high cash-flow drain.

Call for Established Players

Patel advocated for the entry of established corporate giants into the aviation sector, citing the Tata Group's involvement with Air India as a positive example. "We need strong players like Tatas, who came with Air India. We need similar big names also to come into the aviation sector," the NCP leader stated.

The veteran politician emphasized that while India maintains no restrictions on new airline entries, the industry's inherent challenges demand substantial financial backing and operational expertise that only established players can provide.

IndiGo's Recent Challenges

Addressing IndiGo's widespread flight cancellations from the previous month, Patel acknowledged the airline's fundamental strength while critiquing its handling of operational issues. He attributed the disruptions to pilot-related problems and Flight Duty Time Limitation (FDTL) rules, stating: "IndiGo is financially a very strong airline, a very big airline. There was an issue of pilots and Flight Duty Time Limitation rules. I wish they had handled it better."

Despite the recent operational challenges, Patel affirmed IndiGo's continued importance in the Indian aviation market, describing it as a player that "will remain important for many, many years to come."

Industry Consolidation Reality

Patel addressed the current market structure, explaining that the presence of dominant players results from natural market forces rather than artificial restrictions. He referenced the financial collapses of several major airlines to illustrate the industry's unforgiving nature:

• Jet Airways: Financial collapse
• Kingfisher: Financial collapse
• GoAir: Financial collapse
• Other carriers: Similar financial problems

"The monopoly or duopoly is not there because somebody made it like that. In the past, you saw Jet Airways, Kingfisher and GoAir collapse financially and a series of other airlines also had these kinds of problems," Patel explained.

The former minister concluded that strong players in aviation would ultimately benefit the country, emphasizing that financial stability and operational excellence should take precedence over the mere number of market participants.

Indian IT companies are witnessing a gradual improvement in business conditions, driven by rising artificial intelligence adoption among global clients, better execution efficiencies, and supportive currency dynamics. The December-ended quarter appears to have been largely stable for the sector, with positive expectations emerging for the third quarter across consumption-linked segments.

AI-Driven Demand Transformation

Speaking to ET Now, Deven Choksey, MD of DRChoksey FinServ Pvt. Ltd, emphasized that the operating environment for Indian IT firms is becoming increasingly favorable. The primary driver behind this improvement is AI-led demand from global clients who are aggressively transitioning to AI-enabled working models.

"I believe that the overall environment is becoming more conducive for the Indian IT companies. The clients of these companies are getting aggressively into the AI mode of working and as a result the solution providers like Indian IT companies are attracting a large amount of inquiries and converting them into order inflows," Choksey explained.

This shift is also reflected in contract structures, with companies securing longer-duration agreements. Major IT players like TCS and Infosys are demonstrating this trend through their order book inflows, indicating stronger client commitment and revenue visibility.

Operational Efficiency and Currency Support

AI adoption is not only driving demand but also enhancing operational efficiency for IT service providers. Companies are leveraging AI extensively in project delivery, significantly reducing time-to-market and solution delivery timelines to end customers.

Additionally, currency movements are providing short-term margin support to IT companies. While Choksey noted this benefit may be temporary, lasting three to six months, currency depreciation is acting as a tailwind for the sector's profitability.

Sector Performance and Valuation Outlook

The December quarter performance has been reasonably positive for most Indian IT companies, according to Choksey. He emphasized that upcoming guidance commentary will be crucial for confirming the sector's trajectory, though the overall outlook remains positive.

From a valuation perspective, Choksey believes Indian IT companies are not expensive, which helps control downside risk. This positioning suggests limited downside potential while maintaining upside opportunities as business conditions continue to improve.

Broader Market Recovery Expectations

Beyond IT, Choksey highlighted improving conditions across consumption-driven sectors for the third quarter. The October to December festive season period has provided significant thrust to consumption themes, supported by higher disposable incomes resulting from increased direct tax exemption limits and GST rate reductions.

Low interest rates are further supporting discretionary demand, particularly benefiting credit-linked segments including real estate and consumer financing in automotive and other verticals. This environment is expected to drive better growth across multiple sectors, including banking and NBFC, FMCG companies, and automotive ancillaries.

The commentary points to a stabilizing outlook for Indian IT companies alongside broader recovery in consumption-led sectors, raising expectations for stronger third-quarter corporate earnings performance.