Air India ‘bullish’ on long-haul travel

Air India Airbus A 320 aircraft. File | Photo: V. Sudershan

Air India Group, which completes three years of privatisation this month, has recorded the fastest growth in market share on far-flung international destinations such as the U.S., Europe and Australia.

The airline’s passenger shares on routes to North America, Europe, U.K., Australia, Far East Asia and Africa stood at 16% at the time the Tata Group took over the reins of the airline from the government in January 2022. This share has risen to 21% of the total market share, where it is the only Indian player to provide non-stop connectivity since Jet Airways shut down in 2019. Air India, the full-service carrier in the group, has added nine routes to these destinations taking the total long-haul routes served to 37.

Its daily flight frequencies on these routes have more than doubled from 30 to 69. “We are extremely bullish in the long-haul market,” remarked the airline’s Chief Commercial Officer Nipun Aggarwal during a press interaction last week.

“Indian airlines enjoy only 21% share of total international passengers, while there is room to grow up to 50%,” he added.

In comparison, the passenger share of the Group, including the low-cost carrier Air India Express, has grown to by 4% to 30% on domestic routes, while short-haul international routes have seen a modest increase of 1%.

Air India’s focus on long-haul markets is complimented by its efforts to grow traffic on metro-to-metro routes domestically, where the Group is the second biggest with a 30% market share. This provides it with a flow of domestic passengers to its hubs in Delhi, Mumbai and Bengaluru to fill its seats on international flights, while its low-cost arm Air India Express is focused on ferrying passengers from non-metros to these hubs apart from short-haul international destinations.

These far-flung routes are also immensely lucrative for airlines because of higher airfares as well as higher premium cabin seats among other reasons. Air India earned nearly 50% of its total revenue on these routes at $16 billion of the total $34 billion earned in the financial year 2024 although passengers flown to these destinations accounted for only 11.7% of the total 222 million or 26 million passengers.

The top executive said that the airline has seen a 1.6 times growth in passenger revenue while its aircraft capacity has grown to a lesser extent by 1.3 times in the past three years.

To further strengthen its long-haul game, the airline will simultaneously prevent leakages to foreign hubs such as Dubai, Doha and Singapore by ensuring Indian travellers avail travel on its flights.

The airline sees a massive opportunity here as 80% of international traffic flies one-stop and a mere 20% travels on a direct flight, and of the former, a meagre 15% of travel is through a big Indian airport and the remaining 65% prefer an international connecting point.

To attract transit passengers, Air India has reduced connecting times from six hours to three hours for domestic passengers and hopes to reduce this further with improved frequencies.

It also aims to draw passengers from SAARC and Southeast Asian countries to its domestic hubs to provide them onward connectivity to a third international destination

“We want to bring traffic from Southeast Asia, Far East and SAARC to the Indian subcontinent and then take them to Europe, U.S., Canada. So, we will focus on building strong I2I (international to international) corridors at our hubs,” Mr. Aggarwal explained.

This is currently at 10% of the airline’s total international passengers and the airline aims to double this to 15% to 20% in the next two to three years.

The airline’s long-haul ambitions are supported by 11 leased Boeing 777s deployed on key routes like New York, San Francisco, and London, along with some of its six new Airbus A350s. Additionally, some of the seven Boeing 787-9 Dreamliners from erstwhile Vistara now serve routes like Frankfurt and London. These complement Air India’s fleet of 40 legacy widebody Boeing 777s and 787s, which are slated for a retrofit beginning in the second half of 2025, following the upgrade of 27 narrow-body aircraft.

The retrofitted widebodies will feature a 50% increase in premium economy and business class seats, targeting high-paying passengers seeking greater comfort post-Covid.

Air India also plans to introduce first-class cabins on its future Airbus A350-1000s, though delivery timelines are yet to be confirmed. The airline will receive its first Boeing 787-9 from its massive 570 aircraft order in the latter half of 2025, having already added 41 aircraft since 2023.