Premium service airlines in India, with their business and first class seats and onboard meals, have traditionally found the going tough, reports Rhik Kundu in Mumbai. While Kingfisher Airlines had to eventually wind up operations, losses and debts have been mounting for others like Jet Airways and the state-run Air India.
It’s against this backdrop that the Tata Group will mark its re-entry into the airlines space today, six decades after it ceded control of Air India, with Vistara, a joint venture with Singapore Airlines. The environment for operating an airline has turned a bit more conducive in the last six months with crude prices falling, and Vistara is experimenting with innovative strategies like offering premium economy seats (a first for any Indian airline) and new meals every day.
It remains to be seen whether these strategies will pay off, and Vistara will be able to do what IndiGo has done in the no-frills carrier space, emerging as India’s only profitable airline. So far, the price war playing out between the full service carriers and their no-frills counterparts like SpiceJet, IndiGo, Go Air and AirAsia India has hurt full service players.