Indian full-service carriers (FSC) are reducing premium class seats to cater to an increasing demand for cheaper economy seats that remains the preferred choice for the price-conscious Indian traveller.
Vistara, the Tata-Singapore Airlines-backed FSC, has decided to cut down the number of business class seats by half to eight and reduce the number of premium economy seats by 12 to 24. In the process, the airline will add 30 economy class seats.
Air India (AI), another FSC, has completely done away with business class seats on about one-third of its domestic Airbus A320 fleet while reducing business class seats from 20 to 12 on others.
India has three FSCs – AI, Jet Airways and Vistara -- and four budget airlines – IndiGo, SpiceJet, GoAir and AirAsia India. The budget airlines control over 60% of the domestic market.
Vistara CEO Phee Teik Yeoh had told HT in an interview earlier that there was a strong demand for its economy class seats which were mostly overbooked.
Industry experts said a combination of factors such as price, schedule integrity and on-time performance had resulted in a large chunk of corporate travellers shifting to budget airlines.
“Business class value proposition at current fares levels remains weak, given the significant price difference. Corporate traffic especially the premium traffic remains muted and will continue to be challenging in the near term,” said Kapil Kaul, South Asia CEO of aviation consultancy Centre for Asia Pacific Aviation.
The business class passenger load factor was around 50%, said sources. Airline executives said it was a challenge filling the premium class seats when the longest domestic flight is just over three hours long.
“Price remains the key factor. A business class ticket is at times five times costlier than economy and even top corporate executives have started travelling economy class,” said Rajji Rai, chairman of Swift Travels.