Air India is better positioned as a full-service airline with “superior product” than its competitors and will strive to position itself slightly above low-cost carriers, according to its CMD Rajiv Bansal. As the loss-making national carrier works on ways to improve its on-time performance and increase the market share, Bansal said it plans to invest in technological upgradation in the fare management system. The upgradation would be done at Air India as well as its low-cost international arm, Air India Express.
In a recent interview to PTI, Bansal, who took over the reins of the disinvestment-bound Air India last month, said the airline is better positioned as a full-service carrier. “I think our product is superior in many aspects to what my competitors offer and we are positioned better in terms of full-service carrier,” the chairman and managing director said. “We are kind of competing with low-cost carriers (LCCs) also. So, we are catering to a segment which definitely looks at Air India fares and if it is too high, then tends to look at some other fares. For marginal difference, many tend to prefer Air India. That is the segment that I am targeting,” he said. Noting that every customer is price sensitive, Bansal said those who value more leg space and availability of food are willing to give that delta above what is being offered by the LCCs. “That is the customer I am targeting,” he added. Indian skies are dominated by LCCs and leading player IndiGo’s market share stood at 38.7 per cent at the end of July, according to official data.
During the same period, Air India’s domestic market share was at 13.5 per cent. To a query on whether Air India would be repositioning itself to wean away customers from the low cost carriers, Bansal said there is nothing like weaning away even as he added that all airlines are trying to get the same customer. “There are competitors and we are also in the market… everybody is trying to get the same customer. I am trying to position myself slightly above the LCCs, but yet not go too high that people get turned off,” he said. In recent months, Air India has come out with advertisements showcasing additional facilities it offers to customers compared to other carriers. Among others, the airline allows up to 25 kilogram checked-in baggage free of cost in domestic flights. To revive the national carrier, the government has decided to go for strategic disinvestment of the carrier and its five subsidiaries. A group of ministers is working on the modalities for strategic disinvestment of Air India, which has been in the red for long. For the first time in more than a decade, Air India turned operationally profitable in 2015-16.