Vistara set to start operations in October

Mumbai, August 14, 2014 (STAT):-Tata-SIA Airlines Limited (TSAL), the aviation joint venture of Tata Group and Singapore Airlines , said brand name of its new airline will be Vistara.

Vistara aims to start operations by October this year subject to approvals from the Directorate General of Civil Aviation (DGCA ). It will take delivery of its first plane - an Airbus A320-200 - in September and plans to increase the fleet to 20 aircraft that will include A320neos by the end of five years of operations.

Vistara is derived from the Sanskrit word Vistaar, which means limitless expanse. To begin with, Vistara will look at metro cities to offer its service. Tata-SIA executives are gung-ho about the prospects of a full-service airline in India, though they did not reveal the fare and network details. “We are close to finalising the network,” says Phee Teik Yeoh, CEO of TSAL, adding that the number of India’s airline seats per capita at 0.07 is much lower than Australia’s 3.35.

Mukund Rajan, Brand Custodian and Member of the Group Executive Council at Tata Sons, cites a report from consultancy Centre for Asia Pacific Aviation (CAPA) which states that India will become the third-largest aviation market in the world by 2020. He adds that India’s domestic air passenger traffic is expected to grow from 60 million per annum last year to 175 million a year by 2021.

Prasad Menon, Chairman of TSAL, says that Tata Group had made several attempts to enter the aviation sector over the past 20 years, each time with Singapore Airlines, but its attempts did not fructify. “The Tata group never gave up. We withstood the disappointments,” he says. Tata Sons holds a 51 per cent stake in TSAL while the remaining 49 per cent is owned by Singapore Airlines.

Two months ago, the Tata Group launched a low-cost airline - Air Asia India - in a joint venture with Malaysian airline AirAsia. Rajan says that both brands - AirAsia India and Vistara — will operate in different segments and will not compete with each other.

A full-service airline at a time when Indian carriers are making losses has generated mixed responses from industry experts. “In a market where most airlines are bleeding, the management has not given details on cost efficiency aspects and pricing strategy. More clarity is needed on how the airline will achieve profitability,” says an aviation analyst.