More Competition for Airlines

A decade after low-cost carriers led India’s air travel boom, full-service airlines are gearing up for a battle for premium passengers that only the deep-pocketed are likely to win. Flag carrier Air India, which has only offered premium travel, will face more competition from second-largest airline Jet Airways, which on Monday said it would ditch its budget unit and focus on the full-service market amid mounting losses.

The carriers are also bracing for Vistara, a venture between Singapore Airlines Ltd and conglomerate Tata Sons Ltd which will start flying in October. The competition in the full-service sector is heating up with no guarantees there will be enough passengers willing to pay higher prices to sustain three carriers in a market where low-fares dominate and where airlines struggle to make a profit.

Denisha Sahadevan