IndiGo, Air India ramp up loyalty programmes. But they have a lot to catch up

livemint.com:

Subscribe to enjoy similar stories. India’s two largest airlines IndiGo and Air India, which dominate the near-duopoly in domestic skies, are ramping up their frequent flyer programmes to gradually build another potential revenue-generation source in a cut-throat market. Budget carrier IndiGo, operated by InterGlobe Aviation Ltd, in October reached the milestone of one million loyalty flyers under IndiGo BluChip plan.

Tata Group-owned Air India Group’s loyalty membership, Maharaja Club, has surged threefold to about 10 million since it completed merger with Vistara in November last year. “With flying population of India rising, everyone is a potential customer," said Ajay Awtaney, founder of Live From A Lounge, which tracks the aviation sector and frequent flyer programmes (FFPs). “There is a huge opportunity in the market, with a potential of 30-40 million members in the next three to five years." Also read | Mint Explainer: IndiGo adjusts flight path with business class and loyalty programme. Tailwinds or headwinds? About 161.3 million Indians travelled by air in 2024 in the world’s third-largest aviation market, according to data by Directorate General of Civil Aviation.

Ratings firm Icra Ltd. estimates it to grow 7-10% in the upcoming fiscal, riding on higher incomes and deeper penetration. But it’s also tough to make money ferrying air passengers in the country with among the highest tax on aviation turbine fuel, which accounts for 30-40% of an airline’s cost.