Tata Group to step up competition with Indigo! All-economy configuration planes to be moved to AI Express from Air India, Vistara, BA

The Tata Group is set to expand the fleet of its budget airline, Air India Express, by transferring all-economy configuration planes from its full-service carriers, Air India and Vistara. This move is part of the group’s strategy to better compete with Indigo, the market leader in the Indian aviation industry.

Sources familiar with the plan told ET that the first phase will involve the transfer of 17 Airbus A320 Neo aircraft from Air India to Air India Express. Additionally, 10 of Vistara’s all-economy A320 Neo aircraft will join Air India Express once the merger between Vistara and Air India is finalized. The entire transfer process is expected to be completed by mid-2025.

Air India Express is set to experience significant capacity expansion, with the addition of 17 planes from Air India and 15 Boeing 737 Max planes from its own order by the middle of next year. Over the past 10 months, the airline has already added 26 new Boeing 737-8 aircraft to its fleet.

The Tata Group is currently restructuring its aviation business, which will result in the consolidation of four airlines into two: Air India, focusing on the premium segment, and Air India Express, catering to the no-frills segment.

A person involved in the process said, “The group intends to be very clear in terms of positioning of brands. These aircraft are in all-economy seating and fit better in Air India Express, which will be the brand in the no-frills segment.”

Data from global travel data provider OAG reveals that India has the highest share of low-cost carriers (LCCs) in terms of overall airline seats, accounting for 71 per cent of the capacity deployed. Recently, Air India Express received the final approval from the Directorate General of Civil Aviation (DGCA) to merge the business of the erstwhile AirAsia India with itself, becoming a single entity.The person cited earlier said, “We will ride upon our huge fleet and network expansion, in the domestic India market and short-haul international region–unlocking synergies with the merger of the two entities, and network integration with Air India.”