Air India woos Indian diaspora with cheaper fares as it battles cabin woes

Tata Group’s full-service carrier Air India is looking to offer cheaper airfares to 35-million strong Indian diaspora as the airline looks to compensate passengers for old cabin experience, according to Bloomberg.

The Indian diaspora is the airline’s natural constituency, Air India Chief Executive Officer Campbell Wilson told Bloomberg, without sharing more details.

While Air India offers direct flights to several cities in the US and Canada, several non-resident Indians opt for cheaper connecting flights which take much longer.

Air India has in the past faced customer flak for worn-out seats. In February, Union minister of agriculture and farmers' welfare Shivraj Singh Chouhan hit out at Air India for allotting him a broken seat and charging the full amount, asking if the airline was “cheating” air passengers.

The Tata group had earlier announced a $400 million retrofit programme to upgrade the airline’s entire fleet of legacy narrowbody and widebody aircraft. As part of its turnaround strategy, Air India is retrofitting its ageing narrowbody aircraft fleet. There are 27 narrowbody aircraft inherited at the time of takeover that were selected for a complete retrofit with new seats, carpets, curtain, cabin ambience, a three-class cabin configuration, along with a fresh coat of paint, and new livery.

The retrofit schedule will also see more legacy aircraft, including 40 widebody B787 and B777 aircraft undergo makeover with the first B787 flying out for retrofit next month.

Air India is in the midst of a major transformation since its acquisition by the Tata group three years ago. While significant progress has been made since the airline's privatisation, CEO Wilson agreed earlier this year that there is still much work to be done.

The merger of the four Tata airlines into a single full-service carrier, Air India, and a low-cost carrier, Air India Express, was finalised in late 2024. The former Vistara planes are now operating on major domestic routes and key international destinations. With these mergers and the addition of new aircraft, the group's fleet has now surpassed 300 aircraft.

To expand its fleet, India had placed its biggest order of 470 aircraft from French aerospace giant Airbus and U.S. aircraft maker Boeing for $70 billion. This included 250 aircraft from Airbus and 220 from Boeing. Subsequently, in December 2024, the airline signed a deal to purchase 100 more Airbus aircraft, comprising 10 widebody A350 and 90 narrowbody A320 Family aircraft, including A321neo.

However, the airline’s CEO earlier in March warned that the global aircraft shortage will continue for the next four to five years.