Low cost airline, IndiGo has emeged as the second largest airline in the country by market share at the expense of much larger, Air India and Kingfisher Airlines.

IndiGo, which was launche din 2006, offers one class of no-frills service on a single type of plane. This is in contract to the operating model of Kingfisher and market-leading Jet Airways as they offer different classes, fly multiple plane models and offer full-service and low-fare services.

IndiGo is the only airline among the six main airlines in the country, which is making a profit. The Indian aviation sector is seeing a difficult time due to high cost of fuel, high taxes and low earnings.

Some domestic carriers have been asking the government to relax its terms to allow foreign firms to invest more freely in domes airlines. The opening of the sector to foreign airlines for investments will bring in much needed funds for cash strapped carriers like Jet, Kingfisher and others.

Domestic airlines like Kingfisher, Jet Airways and Spicejet have reported losses due to rising costs of fuel and operations. Kingfisher is canceling hundreds of flights as it is unable to pay oil firms for fuel while Jet Airways has been advised to raise funds.

IndiGo is also facing the challenges of intense competition, a weak rupee, high taxes, rising airport fees and the high cost of oil. IndiGo has 21 per cent of the domestic market compared to 17 per cent share at the end of 2010.