October 18, 2021

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

Tata-AI to be formidable competition, says IndiGo

NEW DELHI: India’s biggest airline by market share — IndiGo — is staring at the real competition for the first time thanks to Tata‘s impending acquisition of Air India and AI Express. The low-cost carrier is for the first time rebooking at the inflight comfort on its flights as passengers on its longest pre-pandemic route — Delhi-Istanbul — often used to complain about this front.
“I see them as formidable competition but I welcome them. It is a sensible thing. I think they (Tata-owned AI) will become more economically responsible. Having a large player funded by taxpayers is not fair competition for us,” IndiGo CEO Ronojoy Dutta said at a CAPA Centre for Aviation event on Wednesday.
By next summer another ultra LCC — Akaka Air — that is promoted by billionaire investor Rakesh Jhunjhunwala and backed by aviation veterans like Vinay Dube and Aditya Ghosh will take to the skies. At the CAPA event, Dutta said the new entrant will take 2-3 years to scale up operations, and therefore it will be less of a threat from a competition viewpoint than Tata airlines in the immediate future.
Since Tatas will use AI’s widespread long-haul international network to their benefit, IndiGo realises its product offering on medium flight hauls needs to be a little more comfortable than the current slimline seats. At the CAPA event, Dutta said the airline is considering improved seating comfort through better cushioning on some of its aircraft.
Tatas will have four airlines in their fold now: two low-cost AirAsia India and AI Express and as many full-service AI and Vistara. Amalgamating these four — actually, five as erstwhile AI and Indian Airlines were merged in 2007 but the creases remain — will be a challenge for AI. Singapore Airlines, 49% stakeholder in Vistara, is yet to get onboard Tata’s AI bandwagon. The salt-to-software conglomerate is likely to have a low cost and a full-service airline.
While Tata’s challenges in reviving AI are formidable, IndiGo is facing a renewed legal battle between its co-founder/promoters — Rahul Bhatia and Rakesh Gangwal at a time when the big blue of Indian skies is facing the prospect of a real challenge from another Indian carrier for the first time in years.
IndiGo, which controls almost 60% of the domestic market share, is planning to expand its international footprint by starting destinations in a seven-hour range that it’s Airbus A320 neo family of planes can fly to nonstop.

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