The airline will have an all-economy cabin for Tier B and Tier C cities
In a significant change of strategy, Vistara has decided to drop business class and premium economy seating from some of its aircraft. The airline, a joint venture of Tata Sons and Singapore Airlines, has a three-class cabin. Since inception, it has tried to differentiate itself as a premium brand, in an Indian market dominated by low-cost carriers (LCCs) where intense competition narrows the space to raise fares.
The change underlines the necessity of a hybrid product for full-service airlines in the Indian market, despite the risk of operational complexity and confusing of customers. Both Air India and now-grounded Jet Airways had earlier tried the same strategy; Jet later rolled it back. “The Indian market has a situation in which full-service Vistara airlines, having a 50 per cent higher cost structure than LCCs, compete by matching fares rather than reducing costs. But, their cabin occupancy always remains lower than LCCs. This is due to the impact of lower loads in business class; the differential is significant,” goes a report from aviation consultants CAPA.
Sources aware of Vistara’s fleet planning said of the 50 narrow-body A320 and A321 aircraft it had ordered, it has since asked Airbus to send around 10 of those in all-economy configurations. The aircraft will then have 180 seats, against 164, in a three-class cabin. Vistara will operate these aircraft between Tier B and Tier C cities, where there is less demand for premium class seating, said people aware of the plan. As of now, it will continue to serve on-board meals in all aircraft…
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