Air India eyes 30% market share with new flight plan

Tata group has unveiled a blueprint to increase Air India’s domestic market share to over 30 per cent in the next 5 years. The company has prepared a detailed roadmap titled, ‘Vihaan.AI’ focusing on five key pillars including exceptional customer experience, robust operations, industry-best talent, industry leadership, and commercial efficiency and profitability. This is the first time the airline has revealed its future plans after being acquired by Tata group.

“Over the next 5 years, Air India will strive to increase its market share to at least 30 per cent in the domestic market while significantly growing the international routes from the present market share. The plan is aimed at putting Air India on a path to sustained growth, profitability and market leadership,” the airline said in a statement on Thursday.

Market share

Air India has lost almost three per cent of its market share in the past seven months. In January, it had a market share of 10.2 per cent, which dropped to 7.5 per cent in June, according to the Directorate General of Civil Aviation (DGCA) data. However, it regained 0.9 per cent taking its market share to 8.4 per cent in July. IndiGo is the market leader with 58 per cent share.

As a part of its plan, it has proposed improvements and changes in customer service, on-time performance, technology, product, reliability, and hospitality segments which will take place over the next five years.

“While the immediate focus of the airline remains on fixing the basics and readying itself for growth (taxiing phase), the more medium-to-long term focus will be on building for excellence and establishing scale to become a global industry leader (take off & climb phases),” it added.

The passengers carried by Air India between January and June recorded an increase of 24 per cent. But in July, Air India’s on-time performance was 83 per cent, a drop of almost 10 per cent from 92.9 per cent in January this year.

Slew of initiatives

The airline’s newly-appointed MD and CEO, Campbell Wilson, said that the transformation has already started - a slew of initiatives in areas like refurbishing cabins, serviceable seats, in-flight entertainment systems are already underway.

“We are also adopting proactive maintenance and refining flight schedules to enhance on-time performance. Our fleet expansion will involve a combination of both narrow-bodied and wide-bodied aircraft to cater to varied network needs. The excitement and shared commitment to drive Vihaan.ai is palpable across the organisation and stakeholders will recognise the changes as the new face of Air India emerges,” he added.

This comes even as two new airlines – Jet Airways and Akasa – are also vying for market share.

In October last year, the Tata Group won the bid for the then State-owned Air India. In January this year, it officially took over the airline. The Tata Group also owns Air India Express, Vistara, and AirAsia India. The combined market share of all Tata group airlines is around 24 per cent. The process of merging Air Asia India with Air India has been initiated. “With the market consolidation which Tata explored in the last few years by increasing the stake in Air Asia and Air India buyout, Tata wishes to cater to every segment of passenger travel ..from affordable to luxury under one umbrella. Scaling from 24 to 30% may look to be a small jump but achieving it would be tough in short term but definitely achievable in the medium to long term,” said Nripendra Singh , Global Director, Frost & Sullivan

It also has an aggressive fleet expansion plan.

Fleet expansion

The airline has signed up for lease 21 Airbus A320neos, four Airbus A321neos, and five Boeing B777-200LRs.

The airline has also been in discussion with aircraft makers to renew the Air India fleet. According to a Bloomberg report, Airbus is growing more confident it can secure a landmark purchase of about 50 A350 wide-body jets from Air India Ltd. this week, while Boeing Co. is working on a deal for as many as 150 B737 Max.