Air India plans Dreamliners' push to regain supremacy in domestic skies

In a bid to regain its status as the king of domestic skies and challenge IndiGo’s monopoly, Air India is planning to raise its capacity on domestic routes by using wide-bodied Boeing 787 Dreamliner planes. The carrier plans to use them in its high-capacity routes.

Simultaneously, the airline will fly the A320s between the Tier-2 and Tier-3 cities, which experts believe has huge potential due to the government’s stress on regional route expansion.

“Immediately, we need to strengthen the domestic market and increase capacity. We will strengthen the existing routes by adding capacity because there is a huge potential in this market,” said a top Air India official.

Currently, the airline uses the narrow body Airbus A320 on high-capacity routes.

“Slowly, we will introduce Dreamliners in metros like Mumbai-New Delhi route. We find it will be feasible to offer a high-end product like the Dreamliner will do well on these routes,” the official added. Air India’s 787s have 256 seats each, 18 of the business class and 238 economy seats.

According to data from DGCA, Air India has a market share of 16.4% for the year 2015. Market leader IndiGo is almost double at 36.2% of the market. Meanwhile, data from the International Air Transport Association (IATA) shows that domestic sector in India grew by 20.2% in 2015 — the highest in the world.

When asked if the airline will be commercially viable to operate the Dreamliners in the domestic routes, “A passenger we believe will be ready to pay Rs 200 more for amenities a 787 can provide like more legroom space and higher luggage allowance, which a no-frills carrier cannot provide, we can wipe out the competition there,” the official said.

The official also said that Air India will slowly phase out the A320s operating in the neighbouring countries like Gulf and Middle East and deploy it on the regional routes in order to add capacity. “With falling ticket prices, the Tier-2 and Tier-3 cities are generating a lot of traffic. We will be looking at those cities because the 150-160 seater A320s are the right size of aircrafts on such routes.” the official said.

Air India has already tied up for dry leasing 14 new engine technology A320 neo planes which are to be inducted in the financial year 2017, the official said adding the airline plans to dry lease another 30 narrow body aircraft (A320s) in its fleet over a three periods in its bid to augment capacity.

In 2015, airlines in India flew 81 million passengers in 2015 out of which Air India had only 13.33 million.

“The market leader is deploying almost 95% of its capacity on domestic routes where as we have just 25% our aircrafts functioning in such routes. Our calculation says that if we deploy 50% capacity in domestic routes, our market share target is 50%, “the official said.

Experts though are not convinced with Air India’s domestic turnaround plan. “Air India is suffering from shortage of narrow-bodied aircrafts. Deploying the Dreamliners in the domestic route will increase the operating cost for the airline,” said Devesh Agarwal, editor of Bangalore Aviation, an aviation blog.