Tata Group’s Air India rolls out premium economy to lure more fliers

Air India Ltd. is rolling out a premium economy class for the first time on its narrowbody aircraft, as it seeks to bolster its sagging market share ahead of sector leader Indigo’s plans for a new premium product later this year.

The former state-owned airline, which was acquired by the Tata Group in 2021, is revamping its fleet to have a three-class configuration, offering business, premium economy and economy seats, it said in a statement Wednesday. 

The flights will operate from July 1 on routes between New Delhi, Bengaluru, and Chandigarh. Air India has refitted two of its new A320neo jets, which will fly on domestic and short-haul international routes, it added. The carrier plans to add this new cabin class to the entire fleet over the next year.

The announcement shows intensifying competition in Indian skies with Indigo slated to announce the details of its first-ever premium offering in August, which aims to woo aspirational travelers keen to try business class travel. It also underscores efforts to improve its customer service after facing mounting complaints in the past few months.

Air India, whose domestic market share fell to 13.7% in May versus 14.2% in the preceding month, is also in the midst of a massive merger with Vistara that’s expected by the end of this year. Vistara, a joint venture between the Tata Group and Singapore Airlines Ltd., already has the same three-class structure in its fleet. 

“This comprehensive upgradation of Air India’s physical product is an important component of transforming into a world-class airline,” Campbell Wilson, Air India’s chief executive officer said in the statement. 

The newly-added premium economy will offer larger seats, a four-way headrest, a portable electronic device holder, along with “upgraded crockery and cutlery,” according to the company statement.