Travel companies are reporting strong demand for business-class cabins on domestic routes, with rising corporate incomes and an appetite for premium travel.

"We are witnessing a significant uptick in demand for premium travel (approximately 15-18 per cent y-o-y). Our top domestic routes for our business travel segment include India’s key metro airports of Mumbai, Delhi, Bengaluru, Chennai, and Hyderabad and this comprises around 75 per cent of our volumes today. 

“While, on average, a domestic business seat is priced at about four to five times higher than that of the economy, our corporate segment is displaying an appetite for premium services,” said Indiver Rastogi, President & Group Head, Global Business Travel, Thomas Cook (India), and SOTC Travel.

More demand

According to FCM Travel India, demand for premium segment remain strong as companies enter new financial year. Demand is seen from the IT and manufacturing sectors, with growing volumes from pharmaceutical and healthcare companies.

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"Customers are now willing to spend a little extra for a premium experience. Demand for premium cabin tickets has risen compared with the pandemic and pre-pandemic periods. Our transactions have seen a 70 per cent jump in Q1-CY24 in premium class travel versus the same period last year and an increase of 0.8 per cent versus Q4 CY23," said Sunny Sodhi, Managing Director of FCM Travel India.

Positive Outlook

The trends bode well overall for airlines and IndiGo in particular, which last week announced the introduction of "tailor-made" business products for the country's busiest routes and those with high corporate demand. IndiGo said it will reveal its business class offering, routes, and launch date in August.

Currently, only Air India and Vistara (which are set to merge by year-end) offer business-class seats. Air India Express's new Boeing 737 aircraft also have business-class seats, as these were originally built for Chinese carriers.

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According to the aviation blog Network Thoughts, the top busiest routes in the country based on the number of daily departures include Delhi-Mumbai, Delhi-Bengaluru, Mumbai-Bengaluru, and Delhi-Hyderabad.

While IndiGo's move to offer a premium product comes as it spreads wings overseas and expands partnerships with overseas airlines for passenger feed, it also wants to capitalise on demand within the country. "At present, there is no competition for the Air India Group in the premium segment in the domestic market. Vistara has created a brand name for itself and remains to be seen if its customers remain loyal and stick with Air India post their merger," said an aviation industry analyst.

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