Mumbai, Jan 13: Seeking to tap the “huge growth opportunities”, Air India will increase the number of premium economy and business class seats in its aircraft, realign flight timings to carry more connecting traffic and rationalise network to deploy optimum capacity.Tata Group, which has been steering the loss-making Air India since January 2022, has consolidated its airline business and Air India Group’s revenues have jumped around 10 times to nearly USD 10 billion now compared to less than USD 1 billion in FY20, according to a senior company official.
Air India Group operates 1,168 daily flights, including 313 services to international destinations. Of those overseas flights, 244 are short haul and 69 are long haul.
Generally, short-haul flights have a duration of up to 5 hours, and those having a duration of 5-8 hours are long haul flights.
Air India’s Chief Commercial Officer Nipun Aggarwal said whether it is premium economy or business, load factors have gone up and “we are seeing a lot of traction”.
“We are very focused on premium segment (premium economy and business class) and there are huge opportunities. The revenue growth in front cabin has been almost 2.3X and in back cabin is 1.3X. We have been able to achieve this through better timings, better experience at airports, in-flight and better quality of meals,” he said at a media briefing this week.
Noting that front cabin gives more revenues, especially in the case of full service carriers, and the back cabin basically helps to fill the plane, he said Air India will be increasing the size of the premium cabin in wide-body aircraft.
“In the retrofit we are doing, we will add more premium seats… we are almost doubling the premium seats in the wide bodies… business and premium economy,” Aggarwal said.
There are also plans to have first class seats in wide-body A350-1000 planes going forward. Currently, many of the airline’s Boeing 777 aircraft have first class seats.
As part of the ambitious transformation plan, Air India has started retrofitting narrow body planes and that of wide body aircraft will commence later this year.
Going forward, all narrow body planes of Air India will have three classes — economy, premium and business.
There will be 53,000 premium seats with new/upgraded product on metro-to-metro routes by mid-2025.
Asserting that now there is the right business model and the right product for the market as a whole, Aggarwal said network rationalisation and realignment of flight timings are continuing.
At the time of Air India takeover, Aggarwal said there were 29 overlapping domestic routes and that has been reduced to 20 (from 20 per cent to 12 per cent). There were 23 overlapping international routes and that has come down to 6 (from 26 per cent to 5 per cent).
“We are realigning the network and clearly segregating the market where Air India and Air India Express will operate. This is a continuous exercise… it is based on market dynamics… we will continue to deploy capacities from both the airlines in the best possible way,” he said.