Indian aviation is now dominated by low-cost carriers, with only Air India remaining a full-service airline. With price-sensitive passengers prioritizing affordability over luxury, the future of premium air travel in India faces challenges. Will full-service airlines survive in this market, or is cost-cutting the only way forward?
Low-cost carriers now dominate Indian aviation.
As of November 2024, we have five major airlines: Indigo, Air India, Air India Express, SpiceJet, and Akasa Air. If you look at it, all airlines operate on the Low-Cost Model, but only Air India is The Full-service airline left in Indian Skies. More airlines are on the way to start their operations, and they are Low-cost airlines
What does that mean to Indian Aviation?
As per the expert, Indian aviation is a price-sensitive market where people look over the Ticket price over the service quality they are getting “As Indians want to live King Size but Not willing to pay king size,” that results in the growth of Low-Cost carrier but that also being the quality down and the Services passenger are getting also going down as Low-cost airline works on the model of reducing operating cost as much as they can. In contrast, Full-service Airlines focus on the Service they provide to their customer. If we look closely at the market share of airlines in India, we see that around 80% of the market is taken over by low-cost carriers and only 20% by full-service carriers, combining Vistara and Air India.
Looking into the major changes in depth, we will see that service will be compromised over Price. Airlines have to play it safe with the prices they charge customers. It is not the airline’s fault; it’s because of the Price-Sensitive nature of Indian aviation.
Somewhere, it will impact the service quality of Indian Aviation as Airlines will go for price over the service quality. If you see Middle Eastern Airlines there, they are focusing more on over quality of services they provide to their customer, as their competition is a full-service airline, and to be in the market, they have to focus on the Services they provide to customers. On the other hand, Indian Aviation Customers focus more on prices over services, that’s why Indigo Airlines is successful with more than 60 percent of market share. And three more low-cost airlines are entering the Indian market, focusing on regional connectivity, and prices will be kept low to compete with the market.
As we have news that Middle Eastern airlines fly to Dubai, as seeing to invest in the Indian market by restoring Go First airlines, which means another Low-Cost airline but a strong financially backing.
Air India will remain the only full-service carrier in India.
As expected, domestic passenger flow will prefer low-cost airlines over full-service airlines because of price. Customers are not willing to pay for service over price. They need to travel by air and like to travel over service quality. Full-service airlines prioritize the customer experience with best-in-class In-flight entertainment and meals Service, which adds to more cost of operations and results in increasing ticket costs. On the other hand, Air India’s competition is with Low-cost model airlines that are trying to reduce their Operational cost but removing free meals, in-flight entertainment.
Air India is the only full-service carrier in Indian aviation. Now they have to compete with low-cost airlines in the Indian market, which will affect Air India’s domestic market shares as they are competing with other segments of airlines where price plays more over the services.
If we look at the market shares of airlines, we can see Air India and Vistara’s combined Shares are approximately 20 percent, and the remaining 80 percent is taken by low-cost airlines, mainly Indigo, with 60 percent.
As of now, Air India holds the market share of around 27 percent
You can see this is Delhi-Mumbai flight Prices, which are almost the same, and if we compare the services both airlines provide, this difference will be very little. This will be a Red flag to Air India to get more customer share in the Indian market, as they have to compete with the Indian low-cost dominating market.
But to be honest, I want to see Full Services airlines in the Indian Market with a Luxury service and operating wide-body aircraft such as 777, A350, or more. I’m traveling on an Air Indian Airbus A350, to be honest, it’s a completely new experience that they are providing to their customer. The class of service and the Aircraft Itself are a Luxury with New and best-in-class Services with new cabin styling, and even the crew they have trained for the new aircraft are also best in class if we compare to the old Air India.
