Class wars: Air India plans premium makeover to extend luxury lead over IndiGo

Air India doesn’t seem content with adding Vistara’s business class seats to its overall range of premium services. The Tata Sons-owned full-service carrier is now expanding its business class and premium economy offerings to about 100 narrowbody aircraft to strengthen its lead over IndiGo in the race for passengers willing to pay more for a comfortable flying experience.

Currently, Air India has 62 narrowbody aircraft featuring all three class configurations—business, premium economy, and economy. These include business class seats from the erstwhile Vistara, the Tata group’s premium full-service airline that was merged with Air India in November.

Air India is currently refurbishing 27 of its legacy A320 narrowbody aircraft with new seats and interiors along with the three-class configuration, a person familiar with the airline’s plans told Mint. “With the retrofit exercise (set to) complete by mid-year, Air India will deploy an additional 50,000 premium seats every week on metro-to-metro routes,” this person said, declining to be identified.

Air India’s three-class configuration on its narrowbody fleet features eight business class seats, 24 premium economy seats, and 132 economy seats. On widebody aircraft, Air India also has a first-class section.

Currently, Air India has premium seating in 86 aircraft, which includes 24 widebody aircraft and 62 narrowbody aircraft. Overall, the airline deploys nearly 80,000 premium seats (including first class, business class, and premium economy) weekly within India. Of these, around 47,000 premium seats are deployed on metropolitan routes.

Air India is rolling out other features too for its passengers. On 1 January, the airline became the first Indian carrier to offer in-flight Wi-Fi on its Airbus A350, Boeing 787-9, and select Airbus A321neo fleet.

The planned premium expansion will give Air India a bigger edge over IndiGo in terms of premium seat capacity. IndiGo, essentially a low-cost carrier, in November launched its premium business product, called IndiGoStretch, with a focus on metro-to-metro routes.

An IndiGo official informed Mint for an earlier report that over the next 14 months IndiGoStretch would be expanded to 45 aircraft on 12 routes with a frequency of over 260 daily flights. Currently, IndiGoStretch is available on Delhi-Mumbai and Delhi-Bengaluru flights, and is expected to soon feature on the Delhi-Chennai route as well.

Air India did not immediately reply to Mint’s queries.

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India’s premium airwave

The domestic aviation sector took off in the 2000s as Air Deccan and IndiGo made flying more affordable for Indians. The sector’s turned a full circle, especially since the covid years, with a huge pent-up demand surging for premium and business-class travel in India.

Sanjay Lazar, chief executive of Avialaz Consultants, an aviation consultancy, said the demand is particularly noticeable in the business-class segment.

Air India, which enjoys the lead market share in terms of premium seating, is seeing huge demand for premium seats on metro-to-metro routes such as Delhi-Mumbai, Delhi-Bengaluru, and Mumbai-Hyderabad. Some metro-to-non-metro routes such as Delhi-Amritsar, Delhi-Goa, Delhi-Chandigarh, and Mumbai-Jaipur are also seeing good demand for premium seating, according to the unnamed person cited earlier.

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Air India vs IndiGo

Air India’s business class offering includes complimentary lounge access, a three-course hot meal on board, and seats with adjustable headrest, calfrests and footrests. Air India also offers business class passengers a generous baggage allowance and priority check-in.

IndiGo’s premium offering too has seats with adjustable headrest but doesn’t include lounge access or hot meals. While IndiGoStretch fares start from ₹18,000, Air India’s business class seats are priced much higher.

“Air India is pulling out all the stops with Wifi, IFE (in-flight entertainment), and so much more as domestic offerings,” said Lazar of Avialaz Consultants.

“Air India itself had its business and first-class clientele as did Vistara. Hence it would be easy to extrapolate that the domestic premium/business class market is well over more than 1-1.5 lakh (100,000-150,000) seats per month across networks and metros,” he added. “With a lot of aspirational travellers upgrading, the upside for the Tatas is huge.”

Also read | AI Express, Akasa Air rip premium seats even as no-frills IndiGo adds business class

As for IndiGo’s premium ambitions, Lazar said while “IndiGoStretch is not currently competing with Air India business class, but will be on par with premium Class”, it could wean away cost-conscious corporate passengers from business class on full-service carriers.

“IndiGo is only getting warmed up and it’s only 12 seats per aircraft,” he said. “Our research has indicated that the business class on the Indigo A-321 XLR will be a notch ahead of the current Stretch product, with flat beds and hot meals, and IFE, and more bells and whistles.”

IndiGo has been working over the last 18 months to become a world-class medium- to long-haul carrier, he added. “The competition will be exciting. While IndiGo has a runway in the domestic markets on Air India, Air India has the headstart in the international markets.”

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