India, Dec. 29 -- India has become a graveyard of airlines. From Kingfisher and Jet Airways to Go First, carriers have repeatedly expanded and collapsed in a market that should be among the world's most lucrative. These failures are often attributed to poor management, aggressive expansion, or weak governance. Yet the pattern is too consistent to be explained by firm-specific mistakes alone. The more durable explanation is structural. India is among the world's highest-cost aviation environments, even as its political economy insists on persistently low fares. This contradiction has proved difficult to navigate for most airlines that have attempted to operate at scale.

Indian aviation combines high input costs with constrained yields. Fo...