Shake-up in Indian skies: Vistara bids farewell as IndiGo goes premium

The two events taking place days apart are poised to redefine India’s competitive aviation landscape – one of the world’s fastest-growing aviation markets.

The two developments will also mark major changes for the country’s two largest airlines as the carriers expand and foray beyond their traditional areas of expertise, Bloomberg reported.

Vistara merges with Air India

By incorporating the Singapore Airlines-owned Vistara into the much larger but unprofitable Air India, the Tata Group has taken on one of the most complicated aviation mergers globally that included navigating pilot protests which led to dozens of cancelled flights this year.

The union will be a crucial test of the coffee-to-cars conglomerate’s ability to improve the quality of Air India’s services and turn around the loss-making carrier it bought from the Indian government in 2021 without losing the brigade of loyal Vistara fliers.

The challenge for the no-frills IndiGo, meanwhile, will be to revamp its image — it’s like India’s Ryan Air — and dent Air India’s supremacy in the premium sector.

“All the jabs that Air India and IndiGo are taking are aimed at each other’s strategy,” the report quoted Ajay Awtaney, founder of LiveFromALounge.com, a local aviation analysis platform, as saying.

“It’s now a two-player game,” Awtaney said.

While Vistara’s routes, schedules, in-flight products and crew will stay the same for now, its aircraft will be identified using a separate Air India airplane code.

Even as the two merging airlines try to reassure passengers there will be minimal disruption, travellers and aviation enthusiasts across the country are reportedly mourning the end of Vistara.

Launched in 2015, the airline gained popularity after the nearly three-decade-old full-service carrier Jet Airways went bankrupt in 2019.

Vistara swooped in to fill the gap in the market for the country’s booming business-class travellers, backed by its co-owner Singapore Airlines and its track record of top-class service.

Vistara was the first airline in the country to offer flatbed seats and a premium economy cabin to aspirational Indian fliers.

Post-merger, the combined entity will give Tata-controlled airlines a total fleet of 210 jets, with an additional 470 jets on order from Boeing and Airbus.

Its joint share of the Indian market will be 25 per cent based on September-quarter data from the local aviation regulator, with Air India controlling 14.7 per cent and Vistara on 10.1 per cent.

Meanwhile, Indigo, which had 62.5 per cent market share in the same period, is looking to guard its market-leading position and break out of its low-cost origins.

IndiGo will start offering ‘IndiGoStretch’ business seats on some of its routes later this week, and has already launched a new loyalty programme.

Starting at about $213 (INR18,000), the airline aims to expand its business-class service to all flights on the country’s busiest route between New Delhi and Mumbai by early January next year, according to an October 31 statement.

Premium travellers on its planes will get benefits like priority check-in, anytime boarding, a more generous baggage allowance and a 5-inch recline seat.

Still, these perks might fall short of expectations of price-agnostic jet setters who are used to hot food, footrests and a 7-inch recline common in other airlines’ business-class cabins.

Indigo’s main attraction will be pricing, with business-class tickets starting at a price point that’s 30 per cent lower than Air India’s where a similar Delhi-Mumbai trip will cost about INR 26,000.

IndiGo’s transformation from being just a budget carrier is also a step toward flying its widebody jets which are expected to be delivered from 2027 and will pave the way for its long-haul offerings.

This will dial up the competition further with Air India and Vistara — the country’s only long-distance carriers currently.

“It is a long-term game,” Awtaney said. “They are both trying to get into each other’s turf.”