India's top airline IndiGo goes premium with business class foray

An IndiGo airlines passenger aircraft taxis on the tarmac at Chhatrapati Shivaji International airport in Mumbai

By Nandan Mandayam and VarunVyas Hebbalalu

BENGALURU (Reuters) -India's IndiGo airline operator Interglobe Aviation said on Thursday it will introduce business class on some domestic flights this year, in a departure from its single-class cabin, at a time when urban Indians are increasingly lapping up premium offerings.

The airline, which is the world's third largest by market value, said the flights that will have the business class will be operational by the end of the year.

IndiGo said its business class product would "create a desired option for many who are aiming to travel business, perhaps for the first time in their lives".

Rising incomes have propelled urban Indians to splurge more, from buying premium soaps, expensive cars and luxury apartments, while also flying more often.

Low-cost carrier IndiGo operates just the economy class on its flights, with a handful of extra leg-room seats. The new cabin class would be available on its busiest routes and top business routes, IndiGo said, adding it would disclose further details in August.

The new premium product is another "building block" of IndiGo's strategy that follows the purchases of Airbus A321 XLR and Airbus A350 aircraft as well as internationalisation, CEO Pieter Elbers said.

Full-service carriers Air India and Vistara operate a business class on some of their flights.

IndiGo's foray into the business class is "a very significant step" that would "reflect the needs of the Indian market" and changing strategic direction of the airline, Kapil Kaul of aviation consultancy CAPA India said.

The airline's January-March quarter standalone profit doubled year-on-year to 18.94 billion rupees ($227.6 million), above average analyst estimates of 17.17 billion rupees, according to LSEG data.

It expects first-quarter capacity, measured in available seat kilometres, to grow 10%-12% from a year earlier.

($1 = 83.2050 Indian rupees)

(Reporting by Varun Hebbalalu and Nandan Mandayam in Bengaluru; Editing by Janane Venkatraman, Nivedita Bhattacharjee and Krishna Chandra Eluri)