Will Air India offer first class, business seats on international route at 50% discount?

Will Air India start offering Business and First Class seats on international flights for half the current price? The Minister of Civil Aviation has asked AI to make all possible efforts to sell these seats, including through unprecedented discounts.

A senior official in the Ministry of Civil Aviation pointed out today that if 50 percent discount on these seats helps to fill them up and gain loyal AI customers in the process, this practice should be followed and that the airline has been directed accordingly. He gave the example of the Delhi-Chicago flight which has 35 Business and 4 First Class seats. If all were to be occupied at undiscounted prices, AI could earn over Rs 1 crore from these 39 seats alone. But usually, the airline is able to fill up just about 8-10 Business Seats and more often than not, First Class goes empty.

If these empty seats were to be sold even at a hefty discount a few hours before the flight, the airline’s revenue will improve significantly, this official said. Besides, the airline will gain loyal corporate customers. Minister A Gajapathi Raju has already issued 26 commandments to the national carrier to improve its financial performance and other operational parameters. The dictat to go aggressive on selling Business and First Class seats on international flights is included in these commandments.

Raju has asked Air India to pull up its socks on other fronts as well. He expects the airline to show 90 percent on time performance and report no delays except for technical reasons. The airline has been asked to maintain average cabin crew age on par with other airlines and re-deploy older cabin crew in ground operations. The minister has directed airline officials to do strict inventory checks for spare parts, make sure aircraft are refuelled at stations where ATF is cheaper and submit quarterly financial performance reports to him. Regular route profitability analysis and market comparison studies are also being asked of Air India now.

Meanwhile, the official quoted above also said the airline is expected to transfer about 3,000 employees to other aviation PSUs and ground cabin crew over 45 years in age. He said in both cases, salaries and allowances will be protected and AI will still manage to save about Rs 300 crore in salary payouts alone each year.

On the selection of the next chairman and MD of Air India, this official said parallel processes of selection through a search committee and through the Public Enterprises Selection Board are going on. Though Minister Raju had recommended incumbent Rohit Nandan be given a three year extension, his recommendation was ignored by the Cabinet Committee on Appointments. Instead, Nandan was given a three month extension within which a successor must be found. There has been some talk of Nandan now being granted an year’s extension but there is no clarity yet on whether this will happen.