Air India has introduced a new ‘basic’ fare category that excludes complimentary meals on select domestic economy flights — part of a broader strategy to reduce operating costs and respond to intensifying competition in India’s aviation market. The airline confirmed the move applies to certain domestic routes, with the basic fare including a 15 kg checked baggage allowance, a 7 kg cabin bag, and free non-alcoholic beverages such as tea and coffee.
Strategic Shift Amid Financial Pressure
This initiative comes as Air India — India’s second-largest carrier — seeks to improve profitability after reporting record losses of approximately $3 billion for the fiscal year ending March. Owned by the Tata Group, the airline is under pressure to stabilize operations and cut expenses, prompting it to scale back an ambitious fleet expansion plan. Air India is now reviewing delivery timelines for hundreds of aircraft ordered from Airbus and Boeing.
Aligning With Low-Cost Norms
The unbundling of services — separating meals and other amenities from base fares — mirrors pricing models used by rivals like IndiGo (owned by InterGlobe Aviation) and fast-growing local carrier Akasa Air. As of April, Air India held a 24.7% share of the Indian domestic market, compared to IndiGo’s dominant 65%, according to data from the Directorate General of Civil Aviation (DGCA).
Customer Choice and Flexibility
In addition to the basic fare, Air India continues to offer other economy options — ‘value’, ‘classic’, and ‘flex’ — all of which include complimentary meals. Passengers opting for the basic fare can pre-order meals up to 24 hours before departure. The airline stated it will closely monitor customer feedback during the pilot phase of this pricing tier before making further decisions on its long-term fare structure.
Broad Industry Challenges
Indian airlines are facing mounting cost pressures, particularly from rising jet fuel prices linked to geopolitical tensions in the Middle East. In response, the Indian government allocated ₹100 billion (about $1 billion) in support to fuel suppliers to help cap aviation fuel prices.
Basic fares are available for booking via Air India’s website, mobile app, call center, and airport ticketing offices.