Class war: IndiGo shows Air India it means business

livemint.com:

Mint spoke with say that the business class should be looked at in the context of the airline’s larger plan to focus on improving yields or average revenue per seat. It is also looking to expand globally through the Airbus 321XLR, which is likely to be inducted next year, and the Airbus 350, which is likely to join in 2027. Emails sent to IndiGo and Airbus seeking an official response on the recent development had not elicited any replies at the time of publishing.

Industry watchers said that premium-class fliers make up about 5-6% of the Indian market, and IndiGo will target that segment. “The IndiGo of tomorrow is going to be very different from the IndiGo of 2006 or today. The business class entry is clearly to tap the segment, which has lower capacity now than until early 2019, when Jet Airways was still in operation," said noted analyst Ameya Joshi, founder of aviation consultancy Network Thoughts.

Speaking on condition of anonymity, an airline executive added, “The business class launch is just the beginning of IndiGo’s expansion in international skies." Around the time airlines in India and globally were recovering from the impact of the covid pandemic, IndiGo’s top management decided to shift focus away from load factors to better yields. “If you look at IndiGo’s load factors, as compared to competitors, we may be lower. But that’s because we are focussing on earning more per seat (with higher average fares) rather than just filling it," said an executive who did not want to be identified.

The load factor is a measure of the percentage of seats filled per flight—a higher percentage means more seats are filled. But higher fares can earn more revenue even if fewer seats are filled. A case in point is the passenger