Tuesday, January 19, 2016

Vistara has potential to soar in global air travel market

Vistara turned one on Jan 9.
For co-parent Singapore Airlines (SIA), which owns 49 per cent of the New Delhi-based Indian premium carrier, it would have been a proud day. The rest of the airline is owned by Indian conglomerate, Tata.

Before Vistara was finally born, SIA had tried for two decades and failed twice to secure a foothold in one of the world's fastest-growing air travel markets.
But was it worth the long gestation and has Vistara lived up to its parents' expectations?

On the surface, it looks good for the new kid on the block.
Within a year, Vistara - which operates narrow-aisle planes - has grown to nine Airbus 320s and serves 12 domestic destinations with more than 300 weekly flights.

To date, it has carried more than a million passengers.

Four more aircraft are expected this year with plans to grow the total fleet to 20 jets by the end of 2018.

Not too bad for a start-up in a very competitive market dominated by Air India, IndiGo and Jet Airways.

Closer scrutiny, though, surfaces some concerns.

Filling seats has been a challenge for Vistara, which has so far managed a 67 per cent load factor. This means that, on average, three out of 10 seats are empty each time a flight departs.

In business class, the proportion of empty seats is even higher.

Typically, airlines aim for an overall occupancy of more than 80 per cent.

In hindsight, a three-class configuration - 16 business seats, 36 premium economy and 96 economy - may not have been the best choice in a market where more than seven out of 10 domestic travellers fly low-cost.
19/01/16 Starits Times
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