Air India To Remove First Class From B777-200LRs

chinmay17shetye · Sun Jan 17, 2016 7:54 pm

Another move by the infamous full service carrier, Air India, taken hastily.

Air India plans to remove the first class completely from its B777-200LRs just because of low occupancy for a month on them. Recently, after Air India started its BLR - DEL - SFO long haul flight, it saw an occupancy of approximately 25% in its First and 35% in Business Class. Instead of providing attractive offers or additional benefits to get a better load factor in the premium section, Air India simply chopped off the First Class. Its current configuration in which it has 8 first class seats and 35 business class seats along with 195 economy seats is being changed to a model with 298 economy seats with the rest as business.

Though some people may say that it will prove to be a good decision, the point to be noted is that the route started recently in December 2015. Air India can't simply expect high occupancies on its flights this fast and also with its notorious service quality, the load factors tend to reduce even more with passengers preferring to transit through South Asian hubs. Also, increasing the economy seats drastically from 195 to 298 (an increase of 103 seats) won't give them better profits either.

The reconfiguration just for the San Francisco route will cost AI 6 million$ with 2 million the cost per aircraft for 3 B777-200LRs. Spending this amount on a route may have seemed logical for a carrier like Emirates or Singapore Airlines. But for a carrier like Air India, who has almost all of its routes in losses and is in a debt of almost 7 billion$ should have learned by experience and have tried to get the debt clear.

Reference :

http://economictimes.indiatimes.com/...ral&utm_campaign=ETFBMain&from=mdr

Stitch · Sun Jan 17, 2016 7:57 pm

From what I have read on these forums, I was given the impression that systemwide First Class paid occupancy was very low and it was mostly used by non-revs (airline and government officials).

bennett123 · Sun Jan 17, 2016 8:14 pm

Why are LF in First so low for real passengers?.

Qantas744er · Sun Jan 17, 2016 9:41 pm

Finally a sensible decision.

AI -200LR seat only 238....

EK seat 266

AC seat 301 in the new configuration

DL seat 291

Aeroflot777 · Sun Jan 17, 2016 10:03 pm

Quoting chinmay17shetye (Thread starter):
Its current configuration in which it has 8 first class seats and 35 business class seats along with 195 economy seats is being changed to a model with 298 economy seats with the rest as business.

Sounds like a smart move. First class isn't needed and what they should actually do is revamp the business cabin with new competitive seats and up their in-flight service a tad bit.

Plus they need way more economy seats than they currently have in their cabin for a flight to SFO, so adding 100+ seats, should help out here.

Not many airlines can pull off First these days, and for many it's simply not a necessity. I'm sure AI has done their research about loads and figured it wasn't worth it, contrary to you stating that it's a rushed decision.

Quoting Qantas744ER (Reply 3):

Finally a sensible decision.

Exactly.

seabosdca · Sun Jan 17, 2016 10:47 pm

This is long overdue and the only hope for AI to not lose its shirt trying to fly ULH. Glad to see the GOI is letting it happen.

DolphinAir747 · Sun Jan 17, 2016 11:31 pm

Good move. When their F class menu is a ripped-up sheet of paper held together with pieces of Skotch tape, do you actually expect anyone to pay for it?

reality · Mon Jan 18, 2016 12:13 am

Won't adding 103 economy seats make things kinda tight? Currently economy pitch is 34". Is it going to 31? Will that be good for a 16 hour flight? If they remove 8 first seats and keep the 35 business, that will be a total of 333, compared to:

Quoting Qantas744ER (Reply 3):
EK seat 266

AC seat 301 in the new configuration

DL seat 291

AI is not the low cost price leader (SFO-DEL). Economy non-stop is usually $1000+ rt, while Turkish is $700+ and other 1-stop options are in the low $800s.

Business at $4500 rt is comparable in price to the other airlines, some of which have much better business class service and seats. Of course non-stop is always an advantage.

[Edited 2016-01-17 16:17:54]

jetwet1 · Mon Jan 18, 2016 12:20 am

Quoting chinmay17shetye (Thread starter):
Instead of providing attractive offers or additional benefits to get a better load factor in the premium section, Air India simply chopped off the First Class.

You are missing the big picture though, the demand for first class seats is low to start with, throw in the fact that AI offers a substandard product in the air and on the ground and you end up with the situation they have now, paying customers taking LH/BA/EK with one stop over AI non stop. For a long time the first class cabin has been the territory of pilots, their families and Indian politicians on free flights, there is simply no demand for it from paying customers.

Now if AI were to offer their first class seat as a business class seat then they would probably gain some traction, but as it is, they have no pricing power in the market and it shows.

lightsaber · Mon Jan 18, 2016 12:27 am

Quoting chinmay17shetye (Thread starter):
Air India plans to remove the first class completely from its B777-200LRs just because of low occupancy for a month on them.

Did AI finally stop giving first seats away to patronage? No indication they ever had much revenue.

Quoting bennett123 (Reply 2):
Why are LF in First so low for real passengers?.

Most airlines have accepted that first has gone on to business jets. An airline offering first needs a hub with high premium demand which is not India. You also need connections to fill the cabin.

Quoting Aeroflot777 (Reply 4):
Not many airlines can pull off First these days, and for many it's simply not a necessity.

Exactly. AI is doing the right step removing first.

Add my voice to 'finally a sensible decision.'

Lightsaber

IrishAyes · Mon Jan 18, 2016 12:29 am

Quoting chinmay17shetye (Thread starter):
Air India can't simply expect high occupancies on its flights this fast and also with its notorious service quality, the load factors tend to reduce even more with passengers preferring to transit through South Asian hubs.

Having flown AI First Class JFK-DEL and return in Business on DEL-JFK, I can attest that the business class service was just as good and the seat was actually more comfortable affording better sleep.

Personally, I think this is a sound decision.

Quoting chinmay17shetye (Thread starter):
Also, increasing the economy seats drastically from 195 to 298 (an increase of 103 seats) won't give them better profits either.

Given the fact that now virtually all of the ME3 are going 10-abreast in YCL (with QR being the last one) it really does not make sense for AI to keep a less-dense configuration, although sadly, AI's 34' pitch was perhaps one of the most generous in Y of all carriers.

jfk777 · Mon Jan 18, 2016 12:53 am

why did Air India ever order these planes with First Class seats ? Even 10 years ago when AI ordered their 777 fleet First Class was being ditched by most airlines. The AI First Class cabin is just a ego thing for them to say they have it, it was never done to produce decent returns and a freebie to the people who can claim it for free.

Why does this airline even exist anymore, its was created as a statement of independence of a proud country so it could fly to London in 1947 then to New York in 1961 via LHR. India has a large private sector airline industry today which serves it well but is held hostage to the "needs" of the government owned airline, Air India. AI needs to stand on its own two legs or like the colony it was born from needs to be history.

DocLightning · Mon Jan 18, 2016 1:45 am

Quoting jfk777 (Reply 11):

why did Air India ever order these planes with First Class seats ? Even 10 years ago when AI ordered their 777 fleet First Class was being ditched by most airlines. The AI First Class cabin is just a ego thing for them to say they have it, it was never done to produce decent returns and a freebie to the people who can claim it for free.

Because Air India wants to live under the fantasy that it is an airline of the sort that SQ, BA ,and CX are. And when they are losing money, they don't go out of business. The senior management has to have some uncomfortable conversations with government officials, who then push them more money.

a36001 · Mon Jan 18, 2016 1:53 am

Only First Class is being removed?

jfk777 · Mon Jan 18, 2016 2:13 am

Quoting a36001 (Reply 13):
Only First Class is being removed?

This airline should consider the latest trend in classes, Premium Economy. No one paying ten thousand US Dollars wants to fly AI First Class and few paying five thousand flying Business Class but they may have good demand for people paying two thousand dollars in Y+.

Planesmart · Mon Jan 18, 2016 2:44 am

Some airlines attract first class passengers, but for others, frequent flyers do not associate them as offering, consistent 1st class service if you pay for it. Pleasantly surprised when I went to India on business at AI's request many years ago, to fly 1st. Great service, and every seat taken, but my money would be on virtually every passenger either having paid nothing at all, or upgraded.

Viscount724 · Mon Jan 18, 2016 3:04 am

Quoting bennett123 (Reply 2):
Why are LF in First so low for real passengers?.

Very few markets have enough real F class demand to make offering it worthwhile, which is why many carriers have either eliminated it completely or only offer it on certain routes. J class has also been upgraded to the point where it often makes F class redundant and certainly not worth paying several thousand $$ more for a first class seat. Best to use that space for seats that passengers are willing to pay for.

upwardfacing · Mon Jan 18, 2016 4:29 am

Quoting jfk777 (Reply 14):
This airline should consider the latest trend in classes, Premium Economy

Haha. Premium Eco is still very much a niche product even for airlines whose home markets have an associated niche demographic. Developing countries simply don't have it. Wealthy leisure and corporate travellers will fly business or, occasionally, first class; the rest want to save as much money as possible.

Crazy4Planes · Mon Jan 18, 2016 4:32 am

Good move by AI, the airline doesn't need any first class in its birds. India is highly price sensitive market and no one is willing to pay that much.

chinmay17shetye · Mon Jan 18, 2016 11:19 am

Guys, I understand that removing the First Class is a good move. But, look on the other side. The cost for the reconfiguration costs 6 million$ for the DEL-SFO route. That is 2 million$ for 3 B77-200LRs. Correct me if I am wrong, but, is it a wise decision to spend 6 million on the planes when they are completely surrounded with losses ?
Hardly 2-3 of their international routes make profit.

VTORD · Mon Jan 18, 2016 2:04 pm

Quoting chinmay17shetye (Reply 19):

Yes. Particulary when that class of travel is not generating any revenue. The $6MM would be recouped (you would think fairly easily) through all the extra revenue pax (albiet in Economy) that they will be able to fly eventually.

hohd · Mon Jan 18, 2016 2:31 pm

AI should not have had first class in this sector to begin with. At least now they have realized it is a money loser. They can recoup most of the costs by increasing capacity in business and economy.

ytz · Mon Jan 18, 2016 2:54 pm

Quoting chinmay17shetye (Thread starter):
Another move by the infamous full service carrier, Air India, taken hastily.

Hastily? This is long overdue by most accounts. As in years overdue. Hastily....only by Indian Standard Time.

Quoting chinmay17shetye (Thread starter):
Instead of providing attractive offers or additional benefits to get a better load factor in the premium section, Air India simply chopped off the First Class.

AI will never be competitive in First. Not when the competition includes every EU3 and ME3 carrier to the Europe and the US. And keep in mind, they offer top notch service over all sectors and on the ground. Compare that to what AI will offer F pax in DEL and then just J on the DEL-BLR/BOM/MAA/etc sectors.

Aside from which, you have to look at the route. SFO has lots of J corporate and paid traffic. And lots of Y. Far better to capitalize on that then chase the rarer paid F traveler (probably like a unicorn to AI).

Quoting chinmay17shetye (Thread starter):
Air India can't simply expect high occupancies on its flights this fast and also with its notorious service quality, the load factors tend to reduce even more with passengers preferring to transit through South Asian hubs.

Given their losses and the attractiveness of a direct flight from SFO to the Indian NCR, they should be doing well. How long would you expect the Indian taxpayer to bankroll losses on an experiment? It's great to see proactive management.

Quoting chinmay17shetye (Thread starter):
Also, increasing the economy seats drastically from 195 to 298 (an increase of 103 seats) won't give them better profits either.

I beg to differ. They can probably fill more of those J and Y seats with paid customers than running F with unbankable upgraders. This is the path to profitability. Though, a lot of those folks who used to bank on free upgrades to F might not be too happy about it....

S75752 · Mon Jan 18, 2016 3:59 pm

Are the F suites particularly heavy? Could the weight have also played a role in the consideration to get the most out of the LR's capabilities?

I wonder when they'll remove them from the 77W's too.

ytz · Mon Jan 18, 2016 5:09 pm

Quoting chinmay17shetye (Reply 19):
Correct me if I am wrong, but, is it a wise decision to spend 6 million on the planes when they are completely surrounded with losses ?

If it will stem the losses, absolutely.

There's no reason, with today's fuel prices that AI shouldn't be making money on DEL-SFO. If they are losing money a strategy change is called for. And changing aircraft config might just be the ticket....

ojas · Mon Jan 18, 2016 5:29 pm

For some reason 333 seems too much. I would want to believe that the reporter meant 298 total seats of which 35 will be J and 263Y.

migair54 · Mon Jan 18, 2016 5:54 pm

Not surprised about this, I was quite sure that the Load factor was low and most of them were non-rev.
Actually I think AI should remove the First class from every plane and offer a better business class, Offerind 4 seat in first in the B77W is just silly.

Do this mean that they are going to introduce 3-4-3 in economy, I think they should since EK does and most of Indian pax choose EK over AI. And they can add plenty of seats in the B77W and B77L.

reality · Mon Jan 18, 2016 6:06 pm

"Right now Air India’s 777-200LRs have among the most spacious economy cabins, with just nine seats per row and 34″ of pitch. I’m guessing that they’ll be reducing the seat pitch and also going to the now-industry standard ten seats per row."

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