(FORTUNE Magazine) - The explosive growth of no-frills, low-fare airlines has turned India into one of the world's hottest travel markets. It is also playing havoc with the country's overburdened and under-equipped airports--and with profits at the airlines.

"Every flight gets delayed by 30 to 45 minutes," says G.R. Gopinath, managing director of Deccan Aviation, which owns Air Deccan, India's largest no-frills airline. "There is congestion at the airports before landing and before taking off, and a lack of express exits after landing to get to the parking bays."

Indian liquor baron Vijay Mallya, chairman and managing director of Kingfisher Airlines, which started flying in April 2005, says about a quarter of the fuel used on scheduled flights--or about 8% of his airline's total operating cost--is eaten up by delays. Put another way, as an Air Deccan executive explains, a three-minute delay costs as much as the revenue on two seats.

The reasons for the delays aren't hard to find. India's two busiest airports, Mumbai and Delhi, each have only one functioning runway. There aren't enough arrival and departure gates or parking bays. (Air Deccan has run out of parking spots at its home airport in Bangalore, India's IT hub, and will have to park the 30 new aircraft it has on order at other airports.) And there are shortages of pilots, aeronautical engineers, and air traffic controllers.

"You have to remember that no air traffic controllers were hired for the past six years," says Civil Aviation Minister Praful Patel, who estimates the shortage at about 30%.

The growth in air traffic tripled last year, to 25%, and is expected to hit 100% this year as no-frills airlines continue to expand. "Bangalore airport crossed the traffic projections for 2010 in 2005," says Patel. But the rapid growth in traffic has not brought increased profits: Not one of India's no-frills carriers is making money.

Air Deccan, for example, lost $15.4 million in the six-month period that ended last September. "We estimate it will take two to three years of operations before a low-cost carrier in India achieves net breakeven levels," says Bala Deshpande, director of investments at ICICI Venture Funds Management in Mumbai, which has a 13% stake in Air Deccan.

Just the lack of parking bays at key airports hits airlines in multiple ways. The carriers are unable to offer flights from gateway airports at the most convenient times. Planes stationed overnight at other airports, which have less traffic, are forced to fly routes that don't cover their costs. "Better infrastructure would allow us to use aircraft an extra hour a day, increasing revenues by 7% to 8% and saving 4% to 5% of total costs per passenger per average segment flown," says Ajay Singh, director of SpiceJet, another no-frills airline, which started flying last year.

Among other complaints are relatively high airport charges--78% more than the international average, according to a government study--the high cost of jet fuel, and a lack of secondary airports. "It's easy to be a low-fare airline," says Kapil Kaul, head of the India and Middle East division of the Centre for Asia Pacific Aviation in Sydney. "But it's difficult to be a low-cost airline in the Indian market."

All of which puts pressure on the no-frills carriers to raise ticket prices. Dinesh Keskar, a senior vice president at Boeing Commercial Airplanes in Seattle, says airlines in India are charging $20 for a ticket that ought to be sold for $60. If ticket prices remain low and the infrastructure doesn't improve soon, many of India's highflying entrepreneurs may soon be headed for a crash landing.