Air India’s premium class bet targets ME3 airlines

According to a top executive, Air India aims to take on Middle Eastern giants like Emirates and Qatar Airways and double its share of international transit traffic over the next three years. “We’ve already increased our traffic to the west of India, but now need to enhance connectivity to the east, especially to Southeast Asia, to capture more international-to-international (I2I) traffic,” Air India's chief commercial officer Nipun Aggarwal said in a media roundtable last week. India has been a strategic airspace corridor between Europe, South East Asia, and Australia. Still, it has been unable to tap the traffic that flies over it because of a lack of focus on long-haul flying. Nearly 130 million passengers fly over India annually, of which Dubai takes 10% of the transit traffic, and another 7.5% goes via Doha, while Delhi Airport gets less than 1%. With nearly 600 planes ordered by Air India and roughly 1/6th of them widebodies, that could change over the coming years. Air India has not only deployed newer planes on all its major routes, including New York, London, Paris, Frankfurt, Singapore, and Dubai, but by next year, almost its entire narrow-body and widebody fleet will be relatively new or retrofitted. “We have aligned our flight schedules to connect Western destinations like Frankfurt, London, and Paris with Eastern destinations like Melbourne and Sydney,” he added. Currently, nearly 10% of Air India's total international traffic is from international-to-international passengers, which the company expects to grow to around 20% over the next three years. The airline also plans to double the premium seats in its widebody fleet, as it has seen growing traction for that product. Air India's revenue from front cabins grew 2.3 times compared with pre-pandemic, compared with economy class, which grew 1.3 times. Air India will also add first-class planes to its widebody planes, including the incoming A350-1000 and Boeing 777X. “The premium segment has been a big focus for Air India. We are a full-service airline. We want to be a world-class airline, and this is a segment that we are very focussed on, we very much like, and see huge opportunity in,” he added, “We are building an aspirational and world-class airline…most of the top airlines still have a very niche first-class product on some of their large and prominent routes… If you want to build a world-class airline, if you want to compete with the best airlines that are out there, you need to have a first-class product. It is an aspirational product. It defines how you run and build an airline.” Air India was taken over by the Tata Group in 2022 and now counts Singapore Airlines as one of its investors. It has a 300-plane fleet with nearly 30% of the domestic market.

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