(MENAFN- Live Mint) Last month, the machinist union at Boeing went on strike after which the deliveries of the 737 MAX came to a halt. Both Akasa Air and Air India Express were due to have more aircraft delivered which has now been postponed indefinitely or until the strike is over and deliveries resume. This is another spoke in the many that have delayed deliveries from Boeing.
As the Tata group airlines consolidate from four to two, with the first phase done and the next due on November 11, 2024, with the merger of Vistara into Air India, there are more things happening than a simple merger. A few aircraft tails of Air India popped up operating Air India Express-coded flights on flight tracking websites on the morning of October 9. These airframes were the all-economy-configured aircraft of Air India, which have been around for years.
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As things stand, two aircraft started operating for Air India Express. Air India has a total of five A320ceo aircraft in all-economy configurations which seat 180 passengers. This configuration is similar to former AirAsia India aircraft, which had the majority of its planes being 180-seater A320ceo. Additionally, Vistara has 10 aircraft which are configured in all-economy configurations with 180 seats. In the past, Air India and Vistara operated flights on behalf of Air India Express when the airline was hit by a software glitch and employee unrest leading to delays or cancellations.
What does it mean for Air India Express?
Over the last few months, the group has seen transfer of routes, collaboration among the group carriers in ground services and engineering as well as codeshare for inter-airline transfer of passengers to better connectivity.
The transfer of planes means additional capacity for Air India Express and makes it amply clear that Air India Express will lead the foray against IndiGo in domestic skies. The airline has recently announced new routes and flights amongst destinations where it already operates but did not have direct flights. In many cases, the airline is challenging the IndiGo monopoly on the route and offering an alternative.
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What does it mean for Air India and Vistara?
It remains unclear how many planes will make their way to Air India Express from both Air India and Vistara. In fact, Vistara was the first to transfer planes when two B737-800s were moved from Vistara to Air India Express. However, this means that the full-service arm, a single entity post-November 12, will see a reduction in capacity on offer in the market.
The focus, most likely, will shift to a metro-to-metro relatively high-yielding traffic and sectors which feed into the long-haul flights, along with the narrowbody aircraft being deployed on short-haul international segments that feed the international hub. Air India has launched flights to Phuket, Ho Chi Minh City and Kuala Lumpur in the recent past and rumoured to start more flights in ASEAN over the next few months.
Fleet rationalisation a challenge?
Air India placed orders for both A320 family aircraft and MAX 8 aircraft in 2023. It was largely seen as Air India Express expanding with the MAX 8, as it was already a 737 operator. Over a period of time, the fleet plan at the airline seems to have evolved to let Air India Express grow with both the types, which also takes care of the pilots of erstwhile AirAsia India which was an all-Airbus A320 airline. There are many aspects to this transfer. Air India Express definitely has a cost advantage over Air India but it now has a melee fleet which comprises 737-800, MAX 8. A320ceo and A320neo. Not to mention the MAX 8 which are in different configurations and LOPA (Layout of Passenger Amenities). This is a careful evaluation of having capacity in the market right now rather than having a mono-class operation in an environment where there are supply chain constraints, amongst others.
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This looks like a case where the cost base of Air India and Vistara will be rationalised and offer a standard three-class experience across the network over the next three years.
Tail Note
The transfer of planes involves paperwork which will involve lessors, regulators, airports and financiers amongst others. The move has to be thought out and not haphazard. The question then shifts to how the competition, especially IndiGo, will respond.
As IndiGo moves to a loyalty program over the next few weeks, will it help hold its fort on routes where Air India Express is entering? Traditionally, IndiGo has had a financially weaker competition with not enough ability to sustain the onslaught. With AIr India Express, it is now a different story. Will loyalty help IndiGo sway passengers or are passengers looking for an alternative? Air India Express can definitely play the loyalty game. It will now come to stable and on-time operations, something which IndiGo was known for, until its On-Time Performance deteriorated from its old standards in the recent past.
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