Air India's low cost subsidiary, Air India Express, which unveiled an all new look on October 18 has jotted down a clear business plan. It wants to focus on routes where travelers look for budget fares and don't require free meals, it will stress on ancillary revenue and have competitive pricing like any other budget carrier. Moreover, it plans to do codeshares with Air India and benefit from its vast network.

Aloke Singh, Managing Director of Air India Express in an interaction with CNBC-TV18 elaborated on how Air India and Air India Express will divide routes.

"Air India Express' strength is operating from smaller tier II & III cities non-stop to the gulf markets or Southeast Asia or Singapore. So, if there is, let's say, a Trichy-Dubai or a Kannur-Dubai, or a Goa-Dubai, that will be operated under the Air India Express model, but Mumbai-Dubai, Delhi-Dubai might have a greater share of premium traffic which Air India can serve better," Aloke Sigh said.

After taking over Air India, The Tata Group decided to consolidate its four airlines into two categories: Air India as a full service carrier and Air India Express as a low cost airline. Air India Express after its integration with Air Asia India will do domestic and international flights upto 7 hours and Air India flies to domestic and long and ultra long haul destinations. A full service carrier has economy, business and first class along with free meals while a budget airline has only economy class with chargeable meals. Aloke Singh explained how this model will work between the two airlines.

"Air India will look at routes which have a higher proportion of premium traffic, which have a higher proportion of business traffic, hub to hub traffic, which can be better served by the Air India product. So, the corporate customer may want a business class, he may want a free meal, he will want a certain service on board and on the ground. So, those are markets that Air India knows better than us, we understand the market which is looking for value, we understand that market where we can cross-sell and upsell so, we will always charge for a meal, ancillaries will be a very important part of our revenue stream," Singh said.

Like Air India, Air India Express is also expanding its aircraft capacity. It plans to grow its combined fleet including that of Air Asia India from current 58 aircraft to over 100 in the next one year. This will include 50 of the 190 Boeing 737s that Air India ordered early this year.

"I can give you visibility till December 2024, we will be adding 50 Boeing 737-8 aircraft. So it will be 100 plus planes by December of next year," Aloke Singh said.

Air India Express that now has Air Asia India under its wings is looking to double its combined market share in the next 5 years. Both airlines have started to operate as one entity even as the merger awaits some approvals.

First Published:Oct 23, 2023 4:33 PM IST