From Flyers to Faithfuls: The Intense Battle for Airline Loyalty in India
The Indian aviation sector is witnessing a fierce competition not just for market share, but for the hearts and wallets of its passengers. As customer retention becomes a critical lever for growth, the country's two largest airlines, IndiGo and Air India, are doubling down on their rewards programs in a strategic race to lock in loyal customers.
BluChip vs Maharaja Club: A Tale of Two Strategies
IndiGo's BluChip program, launched in September 2024, has rapidly gained traction, boasting 10 million members within just fifteen months. This puts the Gurugram-based low-cost carrier on par with Air India's long-standing frequent flyer scheme. With IndiGo carrying 107 million passengers in 2025, approximately one in ten flyers is now part of its loyalty ecosystem.
Air India, under the Tata Group's ownership since January 2022, has dramatically revitalized its Maharaja Club, growing membership from 2 million to 10 million. The airline's strategic merger with Vistara in November 2024 provided significant momentum to its loyalty initiatives.
Air India's Integration Challenge and Premium Push
Air India faces a unique integration challenge as it works to merge loyalty programs across its full-service and budget operations. According to company executives, the integration of Air India and Air India Express loyalty programs is expected to be complete by the end of 2026, with trials currently underway.
The integration unfolds in two critical phases:
- Air India customers will be able to redeem Maharaja Club points on Air India Express flights
- Air India Express customers will gain access to NeuPass points (Tata Group's rewards program) across Air India's network
This integration is particularly crucial as Tata's strategy shifts domestic and short-haul routes from Air India to Air India Express, positioning the former as a premium, three-class carrier focused on major metro markets like Mumbai, Delhi, and Bengaluru.
"The Air India Express integration was a must-do item," explains Ajay Awtaney, founder of LiveFromALounge.com. "A chunk of the network is being taken away from Air India and handed over to Air India Express."
Beyond integration, Air India is elevating its premium experience through expanded Maharaja Lounges featuring redesigned spaces, improved culinary offerings, and partnerships with luxury brands. The airline plans new lounges in international hubs including San Francisco and New York.
IndiGo's Revenue-Based Approach and Premium Ambitions
IndiGo has adopted a distinctly different strategy with its BluChip program. The revenue-based model offers eight points for every ₹100 spent, redeemable for free tickets, seat selection, extra baggage, and priority services. A key advantage: points never expire for active members.
The airline has introduced its "Stretch" business-class product, currently available on eight domestic and nine international routes, with plans to expand to 65 aircraft. Customers can upgrade to these premium seats using a combination of cash and points.
"We are expanding Stretch to a total of 65 aircraft, enabling wider network options for business and premium customers," stated IndiGo CEO Pieter Elbers during the January 2026 earnings call.
IndiGo has hired loyalty expert Nik Laming as a consultant and is exploring partnerships that would allow customers to earn BluChip points beyond flights through banks, fintech firms, and lifestyle brands.
The Growing Importance of Loyalty Programs
The global travel loyalty program market, valued at $29.1 billion in 2024, is projected to reach $52.6 billion by 2030, growing at a compound annual rate of 10.4%. This growth comes as airlines face pressure on ticket prices and rising operational costs, compounded by slowing passenger growth.
India's domestic air traffic growth declined to 3.5% in 2025 from 6% the previous year, making customer retention increasingly vital. The market dynamics are stark: Air India Group flew 45 million passengers in 2025 with a 27% market share, while IndiGo carried 107 million travelers, commanding a dominant 64% market share.
"For Air India, scale remains the biggest advantage once its group-wide loyalty programme is fully integrated," notes Mark D. Martin, founder of Martin Consulting. "For IndiGo, the challenge will be sustaining engagement without a premium long-haul network."
Martin highlights the profound shift in airline strategy: "Five years ago, loyalty wasn't even part of IndiGo's strategy. Today, it's central to how airlines think about long-term growth and repositioning themselves as fit-for-purpose carriers."
As both airlines navigate this competitive landscape, their loyalty programs have transformed from peripheral benefits to central pillars of their growth strategies, reflecting a broader evolution in how Indian aviation approaches customer relationships in an increasingly challenging market environment.
