Vistara aids our multi-hub plan: SIA | The Financial Express

Vistara aids our multi-hub plan: SIA

Vistara-AI deal talks on, says Singapore Airlines CEO Goh Choon Phong .

Vistara aids our multi-hub plan: SIA

Vistara complements the multi-hub strategy of Singapore Airlines (SIA), thus making the loss-making Indian carrier a successful venture for the latter than some of its failed international projects, company’s CEO Goh Choon Phong, said on Monday. “We are having in-depth discussions about deepening commercial relationships with our partners in India and it could involve integrating Vistara and Air India. This is still under discussion,” Choon Phong said.

Vistara is a 51:49 joint venture between the Tata Group and SIA and in mid-October, the latter said that it is exploring a potential merger of the Indian carrier with Tata Group’s Air India.

Once it materialises, Tata Group will have two carriers – a full-service and a low-cost – which will adequately address the Indian aviation market, instead of the four different airlines it operates at present. The process towards this has, in fact, started with AirAsia recently selling its residual stake of 16.33% in its India entity to Air India. Following this, Air India said that it has started the process to integrate AirAsia India with Air India Express to create a single low-cost carrier.

“Vistara is the second biggest airline, has been around for less than 10 years and serves 11 international destinations from India. SIA will never be able to operate domestically in India nor to so many international destinations from India. Vistara is already operating at more than 25% of pre-Covid domestic capacity,” Phong said to analysts post SIA’s quarterly earnings on Monday.

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Having a multi-hub strategy allows SIA to benefit from demand outside of its home market through airlines partially owned by it. For instance, Vistara, flies to Germany, the UK and France in addition to Dubai, Jeddah, Male, Kathmandu, Dhaka and Bangkok.

Vistara also plans direct flights to the US and Canada which is currently connected only by Air India other than some non-Indian airline companies. Vistara’s expansion will directly benefit SIA.

“The multi-hub strategy enables us to participate in growth in a particular region or country. That’s why we invested in Vistara. Vistara is recognised as the best full-service carrier in India. Yes, we have had failed ventures overseas before,” Phong added.

SIA announced new partnerships with Garuda Indonesia and Malaysian Airline. Several other such joint ventures are in the works, the company said on Monday.

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Air India’s targets involve capturing a 30% market share in the domestic market in five years. Its share, as of the end of September, stands at 8.6%, as per data shared by the regulator, DGCA. The combined market share including AirAsia India, Air India and Vistara stands at 23.5%.

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First published on: 08-11-2022 at 05:30 IST