Air India may launch premium economy class

New Delhi, Sep 13: Air India may look at introducing a separate cabin product on its flights --premium economy-- to tap the growing demand for this segment of travel in its bid to maximise revenue.

As of now, Tata-SIA-promoted full service airline Vistara is the only domestic carrier which offers premium economy on its flights, besides business and economy class.

"We are looking at introducing a new cabin class, premium economy as we see the demand growing for this product globally," a top Air India official told PTI.

Changing passenger preferences have necessitated exploration of more options for travel, the official said, adding, "it may take a while before a final decision on the issue is arrived at".

"We also have to evaluate the routes, domestic or international, before we firm up our plans," the official said.

Premium economy is positioned between economy and business class, with a different fare and services structure.

The concept was first introduced by Taiwanese carrier Eva Air in 1991, and since then the airlines world over have rolled out this new cabin class one after another.

Premium economy has also assumed significance because of unpredictable global economy as during recession it is the revenue from the business class that gets affected most, he said.

Premium economy fares are on average 60 per cent lower than the business class and almost 60 per cent higher than normal economy travel.

Air India had last fiscal earned Rs 15,000 crore revenue from ticket sales, the official said, adding, "we are aiming at enhancing it to a significantly higher level along with higher yield with new revenue streams and introduction of a new cabin class could be one of the options."

PTI