MUMBAI- India’s largest low-cost carrier, IndiGo Airlines (6E) is introducing Business Class in August 2024, but the world’s leading budget carriers such as Ryanair (FR), Southwest (WN), Wizz Air Group, and easyJet PLC don’t offer them. Now question arises, what led IndiGo to introduce business class seats, and will it survive?
Apart from this, we will understand which low-cost airlines offer business class, and later in the article, we will see whether IndiGo will introduce first class in the future as it has ordered 30 Airbus A350s.
IndiGo Business Class
There’s been a lot of talks since last year about IndiGo premium offerings as it has truly dominated the Indian domestic market with its economy-class offerings. As of June 2024, the airline has a market share of 61 percent, which is a lot.
Well, IndiGo confirmed the news about Business Class during its FY24 earning conference.
Well, it’s not the first as Akasa Air (QP) unintentionally offered A+ and A++ Seats, we can call these seats the premium economy and Business Class seats on its 737 MAX 8 aircraft that were earlier due for delivery to other airlines. But this is due to supply chain issues and the airline will keep them until they get new economy seats.
The Gurugram-based carrier will introduce business class seats on selected aircraft, targeting key domestic and international routes.
Passengers traveling between cities like Delhi (DEL)–Mumbai (BOM), Delhi-Bengaluru (BLR), and Delhi-Chennai (MAA) will soon have the option to upgrade to a premium travel experience.
IndiGo’s international business class service is expected to launch on routes such as Delhi-Dubai (DXB), Delhi-Singapore (SIN), and Delhi-Abu Dhabi (AUH).
However, the question arises as to why IndiGo is choosing the hybrid model and contracting its own successful low-cost business model.
Why 6E Choosing Hybrid Model?
Expert and I think that IndiGo Airlines has already occupied most of the Indian market and there is no other low-cost carrier that has a double-digit market share. So there is very little room to grow and carriers like Akasa Air (QP) and Air India Express (IX) are challenging the status quo with its better offering at affordable fares.
Also, Air India (AI) after its takeover by Tata has been undergoing lots of positive and impactful changes including new branding, and four carriers merging into two (Air India and Vistara, Air India Express, and AIX Connect formerly AirAsia India). This will create a threat to IndiGo’s monopoly in the future.
Air India Express, the low-cost arm of Air India Group has made significant changes to its business model including new branding, four-fare categories (including Business class), premium meals, additional baggage allowance, and more.
With new 737-8 (MAX 8) aircraft, the Air India Express is offering business class seats at affordable fares called Xpress Biz. Each new aircraft will have 4 to 8 business seats and premium services. If you opted for Xpress Biz you will get:
- Recliner Business class seats with Plush and with a seat pitch of up to 58 inches
- No middle seats
- Complimentary Gourmet meals
- Increased baggage Allowance of 25kg for domestic flights and 40kg for international flights
- Priority Boarding services
This is the main reason IndiGo is introducing Business Class on selected domestic and International flights. Especially on the Busiest routes that are also served by AI Express.
Other Reasons
Another reason is the rising demand for premium offerings across the world. Vistara (UK) which is successful in creating brand value is in fact due to its premium economy and business class. Many elites and corporate people choose the airline for such offerings and hospitality.
Air India is also bringing new planes with Premium economy and Business Class seats. It will also introduce the highly comforting first class on its 777s and possibly on the A350-1000s.
A321XLR and A350
IndiGo is set to become the first Indian carrier to take delivery of Airbus A321XLR next year. A321XLR will help IndiGo fly to Europe and the far east of Asia.
These markets have strong competition from established carriers such as Air India (AI), Emirates (EK), British Airways (BA), Etihad (EY), Singapore Airlines (SQ) and Qatar Airways (QR). All these airlines have premium offerings and to compete with them IndiGo will need these services.
So with the introduction of Business Class in the narrowbody fleet, IndiGo is testing the Business product and it’s like a product market fit strategy ahead of A321XLR deployment.
Further, IndiGo which has 30 A350s on order will help them fly non-stop to the immensely profitable North American market. There they will need such premium offerings as some people don’t want to sit in economy seats for 15 to 17 hours.
Now will IndiGo offer First Class or not? I think It will not as many existing carriers are moving forward toward Business Class. Some even eliminated the option. But I will try to find more on this and make a detailed article on it soon.
Bottom Line
IndiGo has announced that they will introduce the business class. This is due to saturation and rising and existing competition from Air India and Air India Express. Further, the IndiGo will take delivery of new planes such as the A321XLR and A350s that will help it penetrate premium and highly competitive markets.
At last, I think, IndiGo will be able to pull this off. But it should learn from carriers that are low-cost but still offer premium services we call them hybrid airlines such as JetBlue (B6), Scoot (TR), Jetstar Group, and AirAsia Group.
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