Air India, the Tata-owned airline has formally begun selling “Premium Economy” cabins. The fares and class of service went live for sale beyond mid-May. The airline had started a soft sale of the product earlier, but the booking engine kept reflecting only three classes for sale—First, Business and Economy. How did one book Premium Economy then? A person who has booked Economy could select seats in the premium economy cabin comprising 48 seats for an additional fee.
How did the premium economy make an appearance and what is different?
In September 2022, Air India announced its first set of expansion in which it would take delivery of five B777-200LR which earlier operated for Delta Air Lines and lease 25 A320/A321neo which would be factory fresh.
The first of the five B777-200LRs landed in November 2022 and soon started operating on routes to America. The additional aircraft are helping the airline start services to San Francisco from Bengaluru and Mumbai and also add flights to New York from Mumbai. As some of its services stabilised, the airline started offering seats in the premium economy at a cost.
The seats could be selected at booking with seats between rows 20 and 25 at a fixed cost of INR 8,985 and enjoy the services.
The airline already has three planes in its fleet, with two more expected soon. The seat pitch is 38 inches as compared to 31–32 inches in the economy and comes with more reclining than economy class seats. The airline also offers Noise cancellation headphones in premium economy and an amenity kit, along with a wider choice of meals and beverages as compared to economy class.
What now?
With a formal launch of Premium Economy, it will allow passengers to search for seats in this class and book. This means that the airline will have separate pricing for this class and not price it at a fixed price over the Economy class.
This will also help the airline market it more aggressively than before and take on the likes of Air France, Lufthansa, British Airways and others who offer this service. Premium Economy has become one of the most sought-after classes of service in the world with even Emirates investing upwards of $2 billion as part of a massive improvement in services which includes retrofitting 120 planes with premium economy.
Leading up to the pandemic, Harry Hohmeister, head of commercial passenger airlines, Lufthansa Group, had said that premium economy is a “money-generating machine,” bringing in 33 percent more revenue per square foot than the traditional economy and 6 percent more than business class.
The delay in launching a formal booking service could be for two reasons, the first being having adequate capacity in the market - which it now has, as compared to just one aircraft in the past and second tweaking the internal and external systems including revenue management and booking engine to manage Premium Economy. There have been multiple instances in the past with Vistara where the premium economy was available at a cheaper rate than the economy and Air India would have definitely wanted to avoid a similar kind of situation by opening up a new class of service in a jiffy.
Which routes is it available on?
The former Delta B777-200LRs are currently being deployed on routes from Bengaluru - San Francisco, Mumbai - San Francisco and Mumbai - New York. With two more aircraft coming in, they would well be deployed to augment capacity on these routes with additional frequency, though new routes remain a high possibility as the airline looks to expand rapidly.
The three B777-200LRs which have originally been with Air India are three class but come with First, Business and Economy class while the ones which it took on lease and were earlier operated by Delta do not have First class, instead has Business, Premium Economy and Economy class.
What next for the premium economy?
The airline planned another expansion before its mega order and is set to induct six B777-300ER aircraft in its fleet. The airline intends to operate premium economy in those aircraft as well, though the ones destined for Air India did not originally have it.
Vistara - the TATA-SIA Joint venture which will merge with Air India by March 2024 has a premium economy in all its wide-body aircraft and most of its narrow-body aircraft (except the two B737s which will be phased out soon and mono-class A320s).
The A350s which come later this year were destined for Aeroflot and are configured in three classes which includes Premium Economy, an indicator of times to come and how the future of Air India could be a three or four-class configuration with the premium economy a major driver of revenue, with credit to Vistara - which was the first Indian carrier to offer this class.
