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Air India may reconfigure first class

Air India may reconfigure first class
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First Published: Mon, Oct 10 2011. 11 59 PM IST

Restructuring plan: From winter, Air India will also advance its New York-emanating flights to India to allow the aircraft reduced time on ground. Photo by Abhijit Bhatlekar/Mint.
Restructuring plan: From winter, Air India will also advance its New York-emanating flights to India to allow the aircraft reduced time on ground. Photo by Abhijit Bhatlekar/Mint.
Updated: Mon, Oct 10 2011. 11 59 PM IST
New Delhi:Air India Ltd may reduce or even do away with its first-class seats on most international flights depending on the outcome of an internal study it is conducting to reconfigure seats on its fleet to boost revenue.
Air India also plans to reschedule timing of some of its US flights, such as those to New York, to boost aircraft utilization and to cut idle time for the wide-body aircraft from the end of this month when the winter season kicks in, two officials at the carrier said.
Restructuring plan: From winter, Air India will also advance its New York-emanating flights to India to allow the aircraft reduced time on ground. Photo by Abhijit Bhatlekar/Mint.
“We are working on an internal study on the seat configuration. The first draft of this should be ready by the weekend,” said an Air India official who declined to be named. “After the assessment is out, we will know what needs to be done.”
Demand for first-class seats, which can cost as much as six times an economy-class seat, has dropped as companies cut travel entitlements for top executives to save costs as the prospect of a second recession in the US in less than four years looms, European nations face a debt crisis, and rising interest rates in India crimp economic growth. A reconfiguration may lead to the airline removing its first-class seats completely and installing more economy- or business-class seats in its place, the official said.
Air India uses Boeing Co.’s B 777-300ER and B 777-200LR aircraft on long-haul flights. While the B 777-300ER has 342 seats, with four in first class, 35 in business, and 303 in economy, the B 777-200LR has a capacity of 238 seats, with eight in first, 35 in business, and 195 in economy class. These aircraft are deployed on the New York, Chicago, Frankfurt, London, Newark, Paris, Toronto and Tokyo routes. Local flights include only business and economy seats.
The first-class seats are sometimes the only ones available on non-stop routes such as New Delhi-New York. They are also the most expensive.
A one-way Delhi-New York ticket for next week on Air India will cost Rs 228,495 for first class, Rs 117,709 for business class, and Rs 34,610 for economy class.
Rival Jet Airways (India) Ltd flies first-class seats only to London and Hong Kong, while other sectors such as Milan and the US have no first-class seats currently. Emirates and Lufthansa offer first-class seats with one-stop flights to New York.
Boeing India president Dinesh Keskar said first-class seats are a matter of demand and supply.
“It all depends on market and availability of passengers. The market for first class is holding out in India just fine,” he said, adding. “the companies are becoming increasingly restrictive on who can fly first class international.”
A second Air India official said the carrier may start reconfiguration on international flights first as it is difficult to ground domestic aircraft depending on the final decision.
Air India’s retired executive director Jitender Bhargava said the move was a “sound decision considering that the loads in first class have been dismally low, notwithstanding the fact that Air India has an excellent product comparable with that of other major international carriers”.
Changing the seat configuration may not be able to help the national carrier shore up its revenue, says a passenger who recently flew Air India from North America as service standards are deteriorating.
“The service standards have gone down significantly,” this passenger said, asking not to be identified, comparing with the same flight last year on Air India.
Air India’s cabin crew is suffering from low morale, having not received allowances from the company for the past few months. “They were serving cold bread to passengers when the ovens were working. A vegetarian lady was given prawn to eat, which was removed at the last minute. Their excuse for not showing the menu card was that they have run out of them for the past few days,” the passenger said, recalling a conversation with the crew.
“Salary and customer services are totally independent of each other,” said an Air India spokesman. “The service standards in Air India are quite high, and this may be a one-off case.”
Allowances form a significant portion of the remuneration of Air India employees.
Bhargava said Air India needs aggressive marketing to attract business travellers.
“Unless some corrective measures are taken to radically improve the commercial and marketing set-up in the organization, possibly by inducting professionals from the open market, even business class may be seen as economically unviable in the not so distant future,” he said.
Meanwhile, from winter, Air India will also advance its New York-emanating flights to India to allow the aircraft reduced time on ground. Currently, the aircraft waits on the ground for more than eight hours in New York after landing in the morning before taking off for India.
The saved time maybe used to add another flight to high-traffic routes such as Singapore, the second official said.
tarun.s@livemint.com
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First Published: Mon, Oct 10 2011. 11 59 PM IST