SUMMARY
- Air India Express aims to double its market share in the next five years, targeting a 20% share in the short-haul international segment and a 15-16% share in the domestic market.
- With an order of 190 Boeing 737 MAX aircraft and additional Airbus A320s, Air India Express has the fleet to support its growth plans.
- The airline is looking to challenge the dominance of IndiGo in the Indian market by offering more routes for budget-conscious travelers.
Backed by a growing fleet and the Tata Group, Air India Express is already eying a significant increase in its market share over the next five years. Before combining operations with AirAsia India, Air India Express primarily operated medium-range international flights. But domestic operations now feature heavily in its operations, and it wants to grow them both in the next few years.
Aiming for increased market share
Low-cost carrier Air India Express wants to double its market share in the next five years, its CEO Aloke Singh recently revealed in an interview. Speaking with Mint, Sing revealed that the carrier wants to become the airline of choice for people traveling to and from tier 2 and 3 cities in India and is looking to capture a larger pie of India’s domestic and international market. He stated,
“In a five-year horizon, we want to target a market share of 20% in the short-haul international segment; right now, we are at 11%. We also want to double our domestic share to 15-16% as compared to 7.5-8% now.”
Photo: WeChitra | Shutterstock
Air India Express’ current fleet type allows it to operate medium-range international routes to the Middle East and Southeast Asia, while its domestic operations focus more on non-metro cities. But like other Indian airlines, its current domestic share dwarfs in front of low-cost giant IndiGo, which now holds more than 60% of India’s market.
Fleet to support the growth
The airline, which until a few years ago was suffering from stunted growth due to a limited fleet size, now sits on an order of 190 Boeing 737 MAX aircraft. With several Airbus A320s of former AirAsia India and a few newly arrived Boeing 737MAXs also joining its fleet, Air India Express can afford to dream big.
Photo: Air India Express
But until now, the airline operated a single fleet type of the 737. With the A320s joining its fleet, Air India Express has deviated from its former business model and moved to a mixed fleet type. While this could be slightly challenging, Sing says that given the ambitious plans of the carrier, a mixed fleet would not affect them that much. He commented,
“There are challenges in a mixed fleet but firstly, we are looking at fleet from group perspective so aircraft asset can be fungible. Also, when you are growing fleet size to that scale, the benefits of single-aircraft type start diminishing, resulting in diminishing returns.”
Air India currently has 64 aircraft, including 28 Airbus A320s. It expects to receive at least 40 Boeing 737 MAXs this year, allowing it to further make inroads into the country’s smaller towns and cities.
Photo: Air India Express
The airline could also start a loyalty program – a basic one – that may be linked to the larger Air India program in some way. All of these efforts are being made to challenge the dominance of IndiGo, which has swept the Indian market in the last few years.
