Renovating for the future of commercial aviation
Commercial aviation market in India is growing at a rapid pace. Better aviation infrastructure fueled by favourable government policies, new airports, better facilities and positive air travel sentiment is pushing number of air travellers higher. The latest phase of ever-changing airline market a major transformative journey of legacy air carrier Air India with new owners, vision and leadership.
Nineties kick started private air carriers in India with open sky policy. In 2003, almost after a decade of open sky policy came into effect, era of low-cost carrier was introduced in India by Air Deccan selling the dream of taking flying by everyone when ticket costs came to a range of Rs. 200-500 on promotional fares. Three years after Air Deccan, birth of another low-cost carrier took place which transformed the aviation landscape. Indigo came into news when the new airline gave an order of 100 brand new Airbus 320 at Paris air show. It was the largest order by any Indian air carrier till then. Gradually Indigo captured the major market share leaving behind all other airlines like Jet airways, Air India, Go air, SpiceJet and Kingfisher. Many of them no longer exist now as the business model of Indigo made them go out of business. By early 2020, Indigo came far ahead of its competitors with just one type of aircraft i.e. Airbus 320/321. Turbulence created by Covid for aviation industry once again took few air carriers off radar. Indigo is a sure winner of the time.
Year 2022, it has been declared that Air India and many of its subsidiaries are handed over to TATA group. TATA group at that point of time was 51% equity owner of Air Vistara, another full-service carrier and held an equity in Air Asia India. In a span of two years the group restructured and renovated the operating model of Air India group and came with Air India reborn. Strategies used by the group shows a long-term vision that is beyond Indian borders. The support of Singapore airlines (holds 25.1% stake in new Air India) and vision to spread wings across globe is steadily unfolding wings. New Aircraft induction including wide body and narrow body, refurbishment of older aircraft, route optimization, restructuring by demarking low frills versus full service, training provisions for skilled manpower requirement and many more. The Air India is progressing not to take down domestic market only, rather capturing the international market with strategic routes across globe. Air India Express is taking over low frills sectors with all economy flights while feeding hubs for international travellers. Air India will be serving high revenue market both locally and internationally.
The Air India - Indigo challenge is the trending ‘AI’ challenge in Indian skies. Indigo is ramping up to compete with the reborn carrier and its strategies. Indigo announced business class seats and frequent flier program in a bid to get high revenue customers and loyalty of their travellers. The competition may get more interesting in coming time giving advantage to the customers. Air India business model is a blend of long, mid, short haul sectors along with domestic market whereas Indigo is restricted to domestic or short haul market due aircraft type.
There is no winning game between the Air India and Indigo as they are not comparable business models. For a healthy aviation landscape, we need both. In fact, 1-2 more national level air carriers will even complement the market. Consumer need connectivity and choice of carriers, based on the consumer profile, they should be able to make a choice.
Whether it is Sydney. Seoul, or San Francisco, we Indians wish to see Air India flying to all major cities of the world in truly the Maharaja Class!
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