Air India’s Strategic Cabin Retrofitting to Focus on Premium Seats
In a strategic move to capitalize on the post-Covid trend of premiumization, Air India is gearing up to prioritize the upgrade of premium cabins on its legacy wide-body aircraft that are slated for retrofitting. The airline plans to nearly double the premium cabins on these aircraft, with a special focus on developing an all-new first class for its flagship Airbus A350, set to be unveiled within the next 2-3 years.
Who, What, When, and Where:
Air India is taking significant steps to enhance the premium flying experience by expanding its premium cabins on legacy wide-body aircraft undergoing retrofitting starting this year. The airline is also set to introduce a brand-new first-class cabin for its Airbus A350, to be rolled out in the next 2-3 years.
Why:
The move comes in response to the increasing demand for premium travel experiences, with Air India witnessing a remarkable growth in front-end revenue following its takeover by the Tatas in January 2022. Nipun Aggarwal, the Chief Commercial Officer of Air India, highlighted that the airline’s front-end revenue has surged by 2.3 times post-takeover, compared to 1.6 times in the economy class.
Expansion and Growth:
Aggarwal emphasized the remarkable progress made by Air India since the takeover, with the addition of 92 aircraft and the revival of many grounded planes. The merger of Vistara and AirAsia India into the full-service and budget segments of Air India has propelled the combined fleet to 300 aircraft, marking a substantial increase in revenue and flight operations.
Strategic Planning:
With India emerging as one of the fastest-growing aviation markets globally, Air India is strategically positioning itself to strengthen its hubs in Delhi, Mumbai, and Bengaluru. The airline aims to enhance connectivity through its hubs, with a focus on facilitating international-to-international transfers and increasing its share in key global aviation routes.
Market Challenges:
Despite the growth prospects, Aggarwal acknowledged the challenges posed by the falling rupee, which impacts the airline’s profitability and cost structure due to significant expenses incurred in foreign currency. However, Air India’s strategic approach, including hedging strategies and a balanced pricing approach, aims to mitigate the impact of currency fluctuations on ticket prices and overall profitability.
As Air India embarks on this transformative journey to enhance its premium offerings and expand its global footprint, the airline is poised to set new benchmarks in the aviation industry. Stay tuned for more updates on Air India’s strategic initiatives and industry developments.
