India is the fastest growing aviation market in the world. Its growth is unfettered not only in the sense of economic activity but also in terms of its contribution to greenhouse gas emissions. The general intolerance of the global community towards carbon emissions is manifesting itself in the form of ever-tightening policies such as the European Union-Emission Trading Scheme (EU-ETS) and the Carbon Offset and Reduction Scheme for International Aviation (CORSIA). In light of the environmentally charged regulatory environment, this article discerns the configuration of the Indian aviation network under a prospective carbon tax regime. India recently signed up for CORSIA, which has yet to take its final form and is set to commence in 2021. By applying a mathematical modelling-based approach, we seek to explore the effect of such a prospective carbon tax regime on the Indian aviation network from the perspective of aviation network strategies, namely, the hubbed and point-to-point (P2P) network strategies. This article determines how the tide of environmental taxes could, at first, tilt the configuration of Indian aviation in favour of one particular network strategy, namely the P2P strategy, but in the long term could lead to a contemporaneous rise in the traffic served by both network strategies. This article also tests the apprehensions of Indian policymakers concerning the growth-stalling effects of carbon taxes and points out that these apprehensions could be far-fetched. Finally, it deliberates on policy implications that can lay the grounds for co-opetition between the low-cost carriers and legacy carriers, thus ensuring a thriving and environment-friendly aviation industry.
