NEW DELHI: Loss-making Air India is embarking on an aggressive drive to improve its market share from the current level of 15 per cent and give competition to Indigo, the market leader with 39 per cent share, by 2017-end. The state-run carrier has decided to focus on tier II and tier III cities with huge traffic potential with innovative concepts. These cities have not been touched by private carriers.
Beginning January next year when it starts inducting newly-leased aircraft, Air India will start with a ‘garland flight’, connecting Kolkata to Bhopal, Indore, Jaipur and Delhi. “It’s a new concept enabling passengers to fly from one tier II city to another,” said an airline official.
The new routes will be supported by the induction of an airbus and an ATR aircraft every month from January onwards. About 450 pilots and cabin crew are being recruited.
The airline operates flights from bigger cities to smaller towns. “These smaller cities have no connectivity and we want to get the first-mover advantage,” Air India CMD Ashwinin Lohani said.
As per the latest figures of the Director General of Civil Aviation, Air India enjoys a market share of 14.8 per cent, which is far below than the market leader Indigo, which corners 39.8 per cent of air traffic. Jet Airways comes second with a market share of 16.3 per cent and SpiceJet follows with 11.7 per cent.
The national carriers are betting big on tier II and tier III cities with growing disposable income and a strong 300 million middle-class consumer base. Cities such as Kanpur, Indore, Chandigarh, Nashik, Bhopal, Surat, Nagpur, Visakhapatnam and others will witness fostering of businesses, attracting investments and labour, thereby causing a spurt in passenger traffic and cargo, said aviation experts.
Cities which Air India is focusing on are Nagpur, Indore, Surat, Ranch, Gaya, Varanasi, Vijayawada, Vishakhapatnam, Tirupati, Jabalpur, etc. A senior official of the airline said a service started recently between Jabalpur and Hyderabad has proved to be an immense success, giving the Telegu-speaking people of Jabalpur an opportunity to connect with their families in Hyderabad in the shortest possible time.
He said the other focus is to tap the increased volume of the students’ traffic, connecting to smaller towns with big cities where the institutes are usually located.
Air India made a modest profit of Rs 8 crore during the last fiscal and has put a brake on losses at around Rs 2,600-2,800 crore, significantly lower than the pevious fiscal when they were Rs 5,574.47 crore. But it still has a long way to go before declaring a healthy balance sheet.