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IndiGo, India’s largest carrier, plans to introduce business class seating, challenging Air India’s dominance in the premium travel segment. This represents a significant departure from IndiGo’s previous model of operating exclusively economy-configured aircraft focused on providing cost-effective travel options.
Industry analysts predict that passengers will benefit significantly from this competition, as both airlines, which collectively transport 80% of domestic travellers, increase their premium seating capacity.
“Increase in seats on the front end on domestic and select international routes is likely to disrupt pricing of business class and even premium economy,” aviation consultancy firm CAPA told ET.
IndiGo’s Premium Class Plans
- IndiGo’s transition from uniform cabin configuration will begin with implementing premium seating on 20 daily flights between Delhi and Mumbai from mid-2024. The airline will also introduce business class seats on all 15 daily flights operating on the Delhi-Bengaluru route.
- The carrier plans to add over 150 premium seats on the Delhi-Mumbai route, one of the world’s most frequented domestic corporate travel corridors. The Delhi-Bengaluru route, another significant business travel segment, will follow suit.
- “Before the end of the year, all flights between Delhi and Mumbai will be equipped with this (business class cabin). By the end of 2025, we will have 45 aircraft operating with the new cabin product,” IndiGo CEO Pieter Elbers told ET.
IndiGo vs Air India
- IndiGo and Air India have adopted different strategies for their business class services. IndiGo opts not to provide complimentary lounge access and hot meals for business class travellers, whilst Air India maintains these offerings.
- IndiGo’s research indicates that business passengers on brief domestic routes value frequent flight choices, private comfortable seating, and reduced airport waiting periods.
- IndiGo’s premium seating is available at Rs 18,000-20,000, matching Air India’s premium economy rates but considerably below business class fares.
Statistics from UK-based Cirium Ascend reveal that business class seat availability in India remains at 50% of winter FY19 levels, when Jet Airways was operational.
The Tata-owned Air India is actively safeguarding its position by utilising Vistara aircraft and newly acquired planes on metropolitan routes to maintain its advantage over IndiGo in attracting premium corporate clients. The former Vistara aircraft offer enhanced comfort and superior service compared to Air India’s older fleet.
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Air India’s Chief Executive Campbell Wilson recently stated that post-Vistara merger, the airline will dominate metropolitan routes with 55% seat capacity.
“We will ring fence these routes with the best product available in our fleet which as of now are the Vistara planes. As Air India’s own aircraft come back refurbished, the fleet will have a uniform standard,” Wilson said.
Most of Air India’s current fleet is aged, excluding 25 Airbus A320 family aircraft leased during 2022-2023 following privatisation.
The carrier has initiated a $400 million renovation project to upgrade 67 older aircraft, advancing its goal of becoming a world-class airline. This includes renovating 27 narrow-body Airbus A320neo aircraft by mid-2025. Its subsidiary Air India Express operates 15 aircraft with business class seating.
Wilson announced that Air India will receive new aircraft from 2026. The airline recently supplemented its 2023 order of 470 aircraft with 100 additional planes.
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