Air India ‘bullish’ on long-haul travel

Air India focuses on long-haul routes, increasing market share and frequencies, targeting international passengers and premium cabin growth.

Air India Group, which completes three years of privatisation this month, has recorded the fastest growth in market share on far-flung international destinations such as the U.S., Europe and Australia.

The airline’s passenger shares on routes to North America, Europe, U.K., Australia, Far East Asia and Africa stood at 16% at the time the Tata Group took over the reins of the airline from the government in January 2022. This share has risen to 21% of the total market share, where it is the only Indian player to provide non-stop connectivity since Jet Airways shut down in 2019. Air India, the full-service carrier in the group, has added nine routes to these destinations taking the total long-haul routes served to 37.

Its daily flight frequencies on these routes have more than doubled from 30 to 69. “We are extremely bullish in the long-haul market,” remarked the airline’s Chief Commercial Officer Nipun Aggarwal during a press interaction last week.

“Indian airlines enjoy only 21% share of total international passengers, while there is room to grow up to 50%,” he added.

In comparison, the passenger share of the Group, including the low-cost carrier Air India Express, has grown to by 4% to 30% on domestic routes, while short-haul international routes have seen a modest increase of 1%.

Air India’s focus on long-haul markets is complimented by its efforts to grow traffic on metro-to-metro routes domestically, where the Group is the second biggest with a 30% market share. This provides it with a flow of domestic passengers to its hubs in Delhi, Mumbai and Bengaluru to fill its seats on international flights, while its low-cost arm Air India Express is focused on ferrying passengers from non-metros to these hubs apart from short-haul international destinations.

These far-flung routes are also immensely lucrative for airlines because of higher airfares as well as higher premium cabin seats among other reasons. Air India earned nearly 50% of its total revenue on these routes at $16 billion of the total $34 billion earned in the financial year 2024 although passengers flown to these destinations accounted for only 11.7% of the total 222 million or 26 million passengers.