A fortnight after launch, Vistara load factor at 56%

Has a passenger load factor of 55% in the busy Delhi-Mumbai sector, compared with 80-85% in other airlines

Vistara, the Tata group-Singapore Airlines joint venture that started services on January 9, has recorded an average passenger load factor (PLF), a measure of capacity utilisation, of 56 per cent, showing the competitive market it is in. Asked for details on the airline’s performance in the past few days, a spokesperson said the average PLF was 25 per cent for business class, 35 per cent for the premium economy segment and 70 per cent for the economy class.

The airline’s aircraft have 16 business class seats, 36 premium economy and 96 economy ones. Vistara’s PLF is across six daily flights on the Delhi-Mumbai route and two each on the Delhi-Ahmedabad and Mumbai-Ahmedabad sectors (barring Sundays). By comparison, the average PLF of competitors such as IndiGo, Jet Airways and Air India across their networks this month is 75-80 per cent, according to airline executives.

“Vistara started taking bookings towards the fag end of the holiday season, after most Indian holiday travellers had already booked and business travel was curtailed. From the outset, as in other areas, our pricing strategy has been disciplined and we chose not to engage in unsustainable rock-bottom sales. Driven purely by the value proposition Vistara is offering, the initial customer response has been positive. With the holiday season now over and business travel back to normal, we have seen the market pick up and demand grow steadily,” said Giamming Toh, Vistara’s chief commercial officer.

When compared to the performance of rival airlines during their launch, Vistara’s PLF is close to that of IndiGo (which started with a PLF of 59.2 per cent) and better than that of GoAir (50.4 per cent) or former full-service carrier Air Sahara (46.4 per cent). But former full-service carrier Kingfisher Airlines, which had started with a bang in 2005 (PLF of 63 per cent) and Jet Airways (79 per cent) had better PLFs.

Vistara, which started with premium pricing of about Rs 7,500 for a Delhi-Mumbai ticket, has had to quickly readjust its strategy, following a price war kicked off by Air India and, subsequently, Jet Airways and IndiGo. Faced with pricing pressure, the airline reduced one-way fares on the sector to about Rs 5,500. Vistara, which has three Airbus A320 aircraft, plans to add two more by March and increase the fleet to 20 in four years. Recently, the airline announced it would expand daily flights from its base in Delhi to Mumbai and Ahmedabad on February 16. It will also add two more destinations, Goa and Hyderabad, on February 20 and March 1, respectively.

As a first in the domestic segment, the airline has sought to introduce premium economy seats that offer more leg space and better food. But experts say consumers are yet to see value in this category. And, this could pose a challenge for the airline, as it will have to justify the extra amount passengers pay for seats in this class.

Amber Dubey, partner and India head of aerospace and defence at KPMG, says though it is too early to judge Vistara’s performance, the airline has brought some excitement to a distressed sector. “Most Indian corporate and individual passengers are price-sensitive. Typically, domestic flights are about two-hour long and most sleep-deprived passengers want to catch forty winks. In such an environment, it might not be easy to charge a significant premium for extra leg room and better food. For Vistara, the key challenge is to strike a win-win deal with corporate clients so that their senior and middle-rank executives might be entitled to business and prem-eco classes, respectively,” he said.