Two years is not a long time in the life of an airline. Born of proud parents, Tata and Singapore Airlines – two global giants with aligned values – the carrier has been transforming the air travel experience and striving to reignite the love for flying for every traveller. R KRISHNAN takes a close look at how, since its inception in January 2015, Vistara has demonstrated its unique value proposition to customers through its innovative offerings and its future plans.
Tata Sons and Singapore Airlines has made a mark in the Indian skies. As the name denotes Vistara in Sanskrit means unlimited wide expanse. This young airline, perhaps, wanted to live up to its name faster than it flew. However, the infrastructure limitations – mainly slots in Mumbai airport – and a host of other factors reduced its speed. Fortunately, this gave its management time to rethink and reinvent that is now becoming evident from the new fervour with which it is raising the bar of competition.
Like all other start-up airlines which flew into the red-zone losing money, Vistara was and is no different. As per market information, during the first year of its operations 2015-2016, Vistara earned a revenue of ₹713 crore against expenses of ₹1113 crore leaving a loss of ₹400 crore. This, according to industry sources, was due to higher expenses on maintenance, ground handling, sales and distribution. One may well ask why an airline should make losses at a time when its lifeline – fuel price was at an all-time low especially when it accounted for nearly 48 to 50 per cent of Indian domestic airline industry. No wonder then that even previous huge losers like Jet and Spice made profits besides IndiGo. These events came to the media’s notice when the Vistara management made a presentation to Tata Sons, the board majority stakeholder in the airline. The airlines unit cost defined Cost Per Available Seat Kilometer (CASK) in 2015-16 was ₹5.28 and Revenue Per Available Seat Kilometer (RASK) was ₹3.28 with maintenance cost accounting for 14 per cent of the total cost. The promoters informed the gap between the operation cost and revenue accrual would narrow following new measures taken to cut cost over the next 12 to 24 months.
This story is from the April 2017 edition of Cruising Heights.
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This story is from the April 2017 edition of Cruising Heights.
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