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The forgotten 5%, India's well-heeled flier, set to be back on airline radar soon

Jul 26, 2024 08:00 AM IST

The premium segment is estimated to be around 5% of the total pie of US $16 billion in annual ticket sales for all airlines in India.

I don’t know how many readers will recall but there was a time in the 1970s and 1980s when air travel in India was the preserve of a very few. Tickets cost an arm and a leg (and then a bit more), hostesses looked better than film actresses and business folk caught flights to eat fancy food that was either forbidden or unavailable at home. The Ravalgaon hard-boiled candy and imported chocolates (and even the cotton earbuds!) offered by Indian Airlines and Air India on flights were brought home as treats for the children by parents who could actually afford such a luxury.

Predictably, certain aspects of air travel took quite a knock once India’s low-fare airline revolution hit in the early 2000s. (Pixabay) PREMIUM
Predictably, certain aspects of air travel took quite a knock once India’s low-fare airline revolution hit in the early 2000s. (Pixabay)

The trend continued late into the 1990s and early 2000s. Flying, especially in the front cabin became a measure of success and Jet Airways' business class offering in the late 1990s had fliers jostling and using their good offices to secure a seat.

To say that the country and the world have changed sounds almost silly but on a recent domestic flight in Thailand I met a five-year-old who flies alone once a month to spend time with one parent who lives in another city post-separation; another aspect where life seems pretty altered from when we were growing up. I certainly don’t remember whizzing around anywhere by air the way we see children do today.

Predictably, certain aspects of air travel took quite a knock once India’s low-fare airline revolution hit in the early 2000s. Among these was the previous pampering of the non-price-conscious or business-class passenger, which practically disappeared in the mid-2000s.

Barring Jet Airways (famous for its Imli (tamarind) sweets!) and Indian Airlines and then Kingfisher for a short but sweet spell - in characteristic Vijay Mallya over-the-top style - no airlines in India offered a differentiated service at a premium. Vistara’s initial experiments to woo premium economy and business fliers didn’t take it very far, so much so that the airline pared down the offering. It almost seemed like the business class flier had been consigned to the dustbin albeit for no fault of his or hers.

By all indications, air travel in India will come full circle by the end of 2024, so to speak. While solid data on the size of the premium segment is hard to come by, it is estimated to be around 5% of the total pie of US $16 billion in annual ticket sales for all airlines in India.

This US $ 800 million is what the airlines have finally decided to turn their attention to by the end of this year with the race primarily between Air India and IndiGo. According to data compiled by MakeMyTrip, 6-7% of the total domestic seats and 9-11% of international seats are currently allocated to business.

On June 19, Air India announced that it has refitted two new A320neo aircraft in a three-class configuration featuring eight seats in business, twenty-four extra legroom seats in premium economy and 132 seats in economy. With this move, Air India introduces premium economy cabins for the first time on narrowbody aircraft. As the months go by, more aircraft will be refitted and more capacity will be available for business and premium economy.

In May 2024, coinciding with its biggest move of ordering wide-body planes, IndiGo announced that it would be introducing business class seats on the busy metros routes, which the airline insiders estimate comprises around 5% of total fliers. The airline’s timing - detailed plans will be available in August around the airline’s 18th anniversary - is interesting in view of the fact that Vistara by the year-end is expected to vanish as a brand once it is fully merged into Air India, leaving a ready market on a platter for IndiGo to quickly fill up.

In other words, Vistara’s premium fliers - a carefully built loyal and worried bunch currently — can smoothly board IndiGo’s newly introduced business product unless Air India is able to prove up to the task, which by all present indications seems quite unlikely. But looked at from a flier’s lens, as a non-price-conscious traveller, do I care which airline takes me from one place to another as long as the legroom is plenty and the cabin quieter?

I’ll digress here a bit. From my experience, I have realised that politicians in particular can do their bit to help reduce state deficits: On a flight in 2022 to Ranchi, I found a minister and his entourage occupying two front rows on the Vistara aircraft, which had no business or premium seats to ensure that the minister was not flanked by the common man, presumably at the taxpayer’s expense.

On further enquiry from sector insiders and MOCA sources, I learnt that this is often the case with many ministers: They like lots of company on their flights. Do all ministers have a fear of flying so they need others to accompany them or is there some strength in numbers that eludes me? Or is it below them in some way to be seated next to the common citizen? I can understand a Shah Rukh Khan or Salman Khan buying up an entire cabin to avoid fawning fans but politicians should in my mind not pass up any opportunity to mingle with the crowds if they want to remain in power. Speaking from my own experience, it’s remarkable how much one can learn from one’s co-passenger.

To come back to the non-price-conscious flier who has been in cold storage for a while, there’s finally some hope on the horizon as the largest airline player dives into hitherto untested waters and Air India tries to fill up the void sister Vistara is bound to leave. Who emerges as the winner is not yet known but all eyes shall be glued on this upcoming race.

Anjuli Bhargava is a senior journalist who writes on governance, infrastructure and the social sector. The views expressed are personal

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