Wednesday, January 09, 2019

Vistara takes-off with premium experience model

Being a 4% market-share player is tough anywhere but more so in the airline industry. The four-year-old Vistara brand is fully cognizant of this fact. Says Sanjiv Kapoor, chief strategy and commercial officer, Vistara, in an exclusive chat with Brand Equity, “We are providing air transportation from point A to point B, we are small, and we have a higher cost structure than LCCs (low cost carriers). We need to be able to attract customers despite all these factors and the only way we can do it is by making them want to fly us.” The game plan: Differentiation. At multiple levels. For instance, offering a new class of travel for the Indian traveller under Premium Economy. While some low-cost carriers have ‘preferred seating’ which they market separately, Premium Economy as a separate cabin service and product is relatively a new story. Kapoor says, “There is data that suggests there is a segment of customers regardless of class of travel that is willing to pay the premium for a better experience.” Vistara is thus operating with a rather unique configuration of Business (8 seats), Premium Economy (24 seats) and Economy (132 seats).
The airline brand has even launched a full-fledged brand campaign talking about its Business and Premium Economy classes. The ‘fly higher’ campaign, created by FCB India, is targeting a certain segment of customers who would be happy to fly business but haven’t considered it because they are too used to flying LCC.
An interesting challenge for Vistara, as per Shashank Nigam, CEO of airline marketing firm, SimpliFlying would be to continue to sell Premium Economy within India without diluting Business Class yields. Essentially implying that it should encourage people considering Economy Class to upgrade to Premium Economy, rather than luring people away from Business Class.

The commercial aviation business is a doozy; it’s challenged on multiple fronts– fickle fuel prices and flabby infrastructure being the two. Branding within this vortex of challenges is tougher than usual. According to Tim Calkins, clinical professor of marketing, Kellogg School of Management, Northwestern University, “Airline branding is a challenge because it builds from the customer experience: thousands of passengers taking thousands of flights, and thus consistently delivering on the brand promise is difficult.”
09/01/19 Amit Bapna/Barand Equity