India's newest airline targets upmarket punters
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VISTARA made its maiden flight on Friday, kick-starting attempts to attract well-heeled passengers in a market dominated by loss-making, no-frills carriers.
Vistara – Sanskrit for “limitless expanse” – took off from New Delhi for financial hub Mumbai, offering flyers premium services including special meal options.
“Being full service doesn’t mean you’re lavish or you’re over the top. It means serving different customers’ needs differently,” chairman Prasad Menon said at Delhi airport.
India’s aviation market is expected to be the third-largest globally in a decade, but the industry is plagued by losses stemming from hefty operating costs and bruising fare wars that has left at least one no-frills carrier, SpiceJet, struggling.
Vistara is steering clear of the budget market dominated by mostly loss-making airlines that last year offered fares lower than the price of a second-class train ticket.
Its premium economy fares for short flights from the capital to Mumbai start at 12,000 rupees (Bt6,358).
The airline is 49-per cent owned by deep-pocketed Singapore Airlines, one of the world’s top-rated carriers. Mumbai-based Tata conglomerate, one of India’s most respected brands, controls the rest.
“India’s aviation market has been expanding rapidly and we have been eager to directly participate in and contribute towards this growth story for many years,” Singapore Airlines CEO Goh Choon Phong said in a statement.
Analysts said Vistara stands a chance of success given the recent drop in hefty fuel prices and the expectation for the ailing Indian economy to pick up.
“There will always be a niche of passengers who do not mind paying a bit more for better quality,” said Amrit Pandurangi, senior director for aviation at Deloitte India.
“It just needs to keep focusing on maintaining its difference from other players in the market.”
Intense competition has seen at least one casualty, with Kingfisher Airlines grounded in 2012 laden with debts and Spicejet currently desperately seeking an outside investor.
Vistara, operating the 148-seater Airbus A320-200 on three routes initially, is the third full-service carrier after state-run Air India and Jet Airways, both in the red.
Tata also holds a stake in an Indian low-cost carrier, which started flying last June, operated by Asia’s biggest-budget airline AirAsia.
The previous national Congress government began allowing foreign airlines to buy up to 49 per cent in Indian carriers in 2012.
