Will Vistara Be India’s New Major Carrier?

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Vistara, also known as TATA SIA Airlines Limited, is an Indian full-service carrier based in Gurgaon. The airline is a joint venture between Tata Sons and Singapore Airlines and was founded in 2013. It commenced operations on January 9, 2015, and has a strong base at Delhi’s Indira Gandhi International Airport. Since then, the airline has gradually expanded its route network and fleet. By June 2016, Vistara had carried more than two million passengers. As of 2019, the airline has a small 4.7% market share in the domestic carrier market.

Vistara Airbus Aircraft
Vistara is a premium full-service carrier of India. Photo: Airbus

The question

Last year was a very happening year in the history of the Indian airline industry. The number of passengers carried and the number of flights operated was at its all-time peak. Until the demise of Jet Airways, India’s largest full-service carrier (FSC) at that time, everything looked good. Since early April, when Jet Airways ceased operations, the Indian airline industry has taken its gradual steps to recovery. After a sudden drop in the number of flights, the airlines were not able to cater to the high passenger demand. As a result, prices increased, and passenger numbers fell.

However, the presence of low-cost carriers (LCC) like IndiGo made sure that the industry didn’t for long. By the end of 2019, the vacuum in slot availability was filled up, mostly by IndiGo, SpiceJet and Air India. But, the void left by Jet Airways in the international market will take years to recover.

As far as the Indian airline industry is concerned, the success of an FSC will always remain a question. After the demise of Kingfisher Airlines in 2012 and Jet Airways in 2019, Vistara and Air India are the only remaining FSCs in India.

jet airways collapse boeing getty images
Jet Airways had the biggest market share among the FSCs in India. Photo: Getty Images

For a very price-sensitive market like India, LCCs are the preferred choice for most of the passengers. However, the presence of premium carriers like Vistara in an LCC dominated market is undoubtedly an attractive option. With its opulent service and an alluring appeal, the airline has set its foot in India as one of the most loved airlines. However, Vistara’s presence, as of now, is very restricted to a few major routes and upper class customers. Its expansion will hence be pretty dependent on the cost-conscious passengers in India and their inclination towards experiencing premium services.

Initial plans and expansion

As of today, Vistara serves 34 destinations with a fleet of 40 Airbus A320, B737, and B787 aircraft. Initially, the airline had planned to operate an all-Airbus fleet of A320-200 and A320neo jets. However, the airline leased nine B737s of Jet Airways in a bid to expand its operations further. Two of these aircraft have already left the fleet, and others would exit by 2022.

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Earlier this year, the airline took delivery of its first B787-9, becoming the first Indian airline to operate the type. Currently, the 787 is being flown on the Delhi-Mumbai sector to complete its flight hours. Later it will be introduced in international sectors like London or Tokyo.

Vistara 787 Dreamliner
Vistara is the first airline in India to fly the B787-9. Photo: Getty Images

Although the airline has a considerable network, its focus is majorly on the busiest routes of India. It has a significant dominance in sectors that have a big presence of high-end business passengers—for example, Delhi-Bangalore and Delhi-Mumbai. On August 6, 2019, the airline launched its first commercial international flight on Delhi-Singapore route. The very next day, it launched Mumbai-Singapore flights. Since then, the airline has launched flights to Kathmandu, Colombo, Bangkok, and Dubai.

Premium services

Unlike other airlines in India, Vistara is one of its kind to offer various cabin classes. On all its A320s, the airline has divided its cabin into business, premium economy, and economy. With only 158 seats, it also offers a generous seat width and legroom. Moreover, the airline’s wireless WiFi inflight entertainment system can be accessed by all passengers in flight.

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The inflight food is catered by TajSATS Air Catering, another joint venture between Tata and a Singaporean company. Vistara’s inflight meal is one of the most appreciated aspects of the airline. So much so, that even an economy passenger can savor a business class meal.

Vistara 737 ex-Jet Airways
Vistara has an attractive quality. Photo: Vistara/Twitter

Having Singapore Airlines (SIA) as its parent company has helped Vistara in its evolution. Many foreign carriers like British Airways, SilkAir, SIA, Japan Airlines, United, and Lufthansa, as a result, have relied on Vistara for their codeshare network in India. Furthermore, frequent flyers can earn and redeem miles with the KrisFlyer program on Singapore Airlines and SilkAir flights.

Challenges in the near-future

Although Vistara provides a unique experience, its viability in the Indian airline industry will always be at risk. It is, in some sense, relatable to the story of Kingfisher Airlines. Just like Vistara, Kingfisher was one of its kind, premium airline in India. However, operating a high-cost model in a price-sensitive market like India was one of the apparent reasons for its fall. Many can argue that the scenario then was way different; however, it wasn’t.

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Around 2011, the world was still recovering from the global financial crisis. India had been severely affected by its consequences, and the airline industry had taken a hit. Passenger numbers dropped sharply, and the remaining demand was mostly for low-cost carriers. This example was evident within Kingfisher itself, as its low-cost subsidiary Kingfisher Red performed better than its parent company until complete cessation.

The post-coronavirus period will be pretty relatable to the abovementioned scenario in economic terms. Average disposable income will fall, and passengers will prefer cheaper LCC flights on domestic routes. Vistara will hence face an imminent threat to its existence. Although the airline has strong financial support, unlike in the case of Jet Airways and Kingfisher, it is worth pondering if its survival will be fruitful at all.

Vistara might struggle in the post-coronavirus period. Photo: Boeing

Time will tell

Vistara, in every sense, is highly capable of becoming a major FSC in India. The Indian airline industry has evolved, and there is a commendable demand for premium travel. However, Vistara, for the time being, will have to adapt by sacrificing its premium offering and reducing ticket costs. Once the situation improves, the airline can gradually return to its normal ways.

With the fall of Jet Airways, Vistara is in an excellent position to compete in high-demand international sectors like Mumbai-London (Jet Airways had three daily flights). Routes like these have an existing vacuum that has not been filled up yet. This might help Vistara compensate for possible losses on domestic flights.

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Do you think Vistara can become a major FSC in the Indian airline industry? Let us know in the comments.

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