Hey folks, Pratham here.

Welcome to Paradox Weekly, a Masters' Union newsletter, where we break down the ideas, trends, and contradictions shaping business today.

I flew out of Delhi last month.

Something about T3 made me want to understand more about the aviation industry.

I kept thinking: who paid for all of this?

Turns out, every airline that lands there did.

While airlines are bleeding losses, airports are minting profits. That’s today’s paradox.

Indian airlines collectively lost Rs 5,289 crore in FY2025.

Same year, GMR Airports posted an EBITDA margin of 55 percent.

Adani Airports posted Rs 3,251 crore in EBITDA on Rs 10,771 crore in revenue.

IndiGo, the most efficient airline in Indian history, posted 26.3 percent, Rs 7,253 crore in profit.

GMR earns double IndiGo's margin.
Adani earned Rs 3,251 crore.

Neither of them flies a plane.

165.5 million passengers flew domestically in FY2025. Up 8 percent year on year. India is one of the fastest-growing aviation markets in the world.

But the airport benefits while airlines suffer?

Each additional passenger is more retail revenue, more duty-free, more parking fees, all flowing to the same infrastructure regardless of which airline got them there. Growth is automatic.

For airlines, more passengers means more carriers bidding on the same routes, lower fares, thinner margins.

The same 165.5 million people walking through terminals is the best number in Indian airports and the worst number in Indian airlines.

27 Indian airlines have shut down since 1994.

Every collapse has a personal story.

Kingfisher was Mallya.
Jet was the promoter.

But two dozen failures across thirty years is a structural outcome.

Aviation Turbine Fuel costs Indian airlines 35-40 percent of operating expenses, against 30 percent globally. It sits outside the GST framework, so airlines earn zero input tax credit on their single biggest cost.

Aircraft leases are in dollars while their revenue is in rupees.

Aircraft Maintenance (MRO) is taxed at 18 percent here versus 5 percent overseas, so carriers fly planes out of India just to fix them.

Airports carry none of this.

They operate under a framework that guarantees returns on invested capital. If an airport under-recovers in a regulatory period, the regulator adjusts the tariff upward next time.

There is no equivalent protection on the other side of the terminal door.

IATA's Willie Walsh called Indian airport charges the highest he'd seen anywhere in the world.

Air India formally asked for a 30 percent reduction on landing fees for long-haul routes at Delhi. The request was dismissed.

And airlines can't leave.

The slot rule requires 80 percent utilization.

If you give up a route and you permanently forfeit those landing rights.

GMR controls Delhi and Hyderabad.

Adani controls Mumbai and six more.

Together they process roughly half of India's air passengers.

Airlines are required to compete.

Airports are not.

Then the government launched UDAN.

The scheme was designed to fix Indian aviation.

It was to make flying more accessible for smaller cities. 

Rs 4,023 crore in subsidies went to airlines to cover losses on thin routes.

The subsidies went to airlines.

A larger, more valuable passenger base flowing through regulated monopoly infrastructure went to the airports.

The Parliamentary Standing Committee called the airport regulator largely a rubber stamp for airport developers in August 2025. A proposal to restructure it on a SEBI model has been sitting unimplemented since 2023.

GMR and Adani are doing exactly what the framework promised them. Delhi airport is exceptional. My problem is not with them. The design produced this outcome, and the design is the question nobody is asking.

IndiGo holds 64 percent of the domestic market, a cost structure no competitor can replicate, and Rs 7,253 crore in profit. It is the only airline that figured out how to survive here, and it did it by getting so large that costs which are fatal at smaller scale become manageable.

While all airlines are bleeding, Adani and GMR are minting. 

The companies at the competitive layer drive real growth and fight hard for every point of share.

But if there's a layer above extracting a toll on every transaction regardless of who wins below, most of that growth is going to someone else. 

IndiGo won Indian aviation.

And every time it does, GMR and Adani gets richer.

Who is the airport in your business?

I read every email.

Until next week,
Pratham