Air India increases economy seats, competes with low cost carriers

Air India is gearing up to fight the low cost carriers, or LCCs in the domestic market. In March, it had beaten even IndiGo in seat factor (number of occupied seats as a percentage of total number of seats on a plane) and now it has decided to lease 19 Airbus 320 aircraft with an all-economy seating.

The LCC model is based on single configuration seating and what Air India is doing is to compete with LCCs by not only offering single class configuration on its aircraft but also by increasing the total number of economy seats available.

Air India. Image courtesy Flickr[/caption]

In a meeting of the board of directors this afternoon, a proposal for leasing the aircraft, which will replace 19 A-320 aircraft that are being phased out, was approved. The aircraft being phased out are part of an order placed by Indian Airlines in 1989; 14 of the A-320 being phased out are owned by Air India while five are leased. While the owned aircraft will be sold, the leased aircraft will be returned after their current lease agreements lapse.

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The induction of the leased capacity, which is expected to begin in the third quarter of this fiscal, will see an increase in seats as well. The aircraft that are being phased out offer seating ranging from 144 to 168. The new aircraft will seat 180 passengers and help the airline fight the LCCs more effectively.

There is another reason for the LCCs to gird up their loins. The Dreamliners will be back in operation on domestic sector within about a week and international operations should commence in two weeks. This would add further capacity to the airline on domestic routes and enable it to open new fronts internationally like Australia.