Air India, under the Tata Group, is all set to improve the service standards at Indian airlines and India’s largest carrier in terms of market share – low-cost carrier – has already announced to improve its services.
“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.
Dutta also said the airline is considering improved seating comfort through better cushioning on some of its aircraft.
Post the acquisition, Tatas will use AI’s long-haul international network to expand internationally.
As services at Air India will improve, IndiGo’s product offering on medium-haul flights needs to be improved to match AI’s standard, at least, partially.
The Tata Group will have two full-service carriers in Vistara and Air India. The service quality of IndiGo is not to be compared to IndiGo, which is a low-cost carrier that offers cheaper flying options to passengers in a single class configuration.
It is not just full-service carrier like Air India and Vistara but also billionaire Rakesh Jhunjhunwala-promoted Akasa that will add to the competition in low fare space in India.
Akasa announced recently that the airline will start operations by summer months next year.
Dutta, however, believes that the new entrant will take 2-3 years to scale up operations and therefore it will be less of a threat from competition viewpoint than Tata airlines in the immediate future.
The government, last week, announced the Tata Group to be new owners of 100% stake in Air India, Air India Express and 50% stake in ground handling company AISATS. The transfer of the airline to new owners is likely to be completed by the end of December.