A few days ago I tweeted about what will matter most for the TATA-SIA venture, now named Vistara, the configuration of the aircraft. There are more opinions online than the seats in that aircraft and I have my own about how premium can an airline get in India?
Just before its demise, Kingfisher did an internal assessment and analysis of what should be the offering and concluded with a 164 seater A320 with 8J and 156Y. Sad that only few birds were converted to this configuration before the airline went bust. The market surely has grown leaps and bounds since then, but one must never forget that the Indian market is cost sensitive. The same people, who are going to Goa and Kochi on cheap Air Asia fares, will quickly switch to trains and busses when the fares cross a certain threshold.
Kingfisher, which operated a 32J + 119Y configured A321 in Indian skies, had to keep them on ground during the off peak times, since they couldn’t even fill up half of those seats even between Mumbai & Delhi, the busiest air corridor in India with maximum business class seats.
Jet Airways has played around time and again with the configurations and service patterns and beginning October will shift back to FSC again & have anywhere between 8 and 28 J seats depending on the aircraft. Air India operates their A319, A320 and A321s with a mix of business class configurations across routes.
There was a time when FSC started behaving like LCC, and soon the LCCs started behaving like FSC. With Kingfisher, Jet Airways, Air India, cutting down on food, cutlery, PTV, and also starting to charge for it on one end, so FSC giving premium seats, providing food along and some even having a European style business class with empty middle seat.
Vistara, as per news reports, will have a premium configuration of 16J (4 rows), 36Y+ (6 rows) and 96Y (16 rows). Yes these are talks and mostly speculations of how they will target mid managers who will not take Business but Premium Economy and so on. Of all the big and small companies that I know off, majority of the bookings happen with cheapest options along with airline+timing combination.
Doing some research on fares for this blog post was challenging for me since Indian aviation companies these days have an eternal sale going on. However, I did a search for D+21 days with a Monday/Friday combination for peak traffic tariff. The fare varied between 4000(SG) – 9110(9W) with an average of 5500 for most of the flights. For the same dates, business class fare on Air India or Jet Airwaysranged from 26000 to 42000!! Go – Businesswith its European style middle seat empty business class was available at 10000, less than a 1000Rs more than the highest in economy.
SpiceFlex which comes with meal, baggage allowance, no change fee and priority check-in was availableat roughly 9000rs and an IndiGo ticket with meal and first row seat was costing similar. IndiGoseems to have got their offering like a true LCC – Fast Forward services separate, Meal & Seat separate and so on, unlike SpiceFlexwhich combines all into one. I haven’t had the time to check sector wise or flight wise, which of this is cheaper but a bundled option and an unbundled one to be compared from an LCC perspective, the unbundled is the way forward in true LCC philosophy.
With all these details, where are we heading to? What will be Vistara’s premium economy pricing and will people occupy those 36 seats or opt for one of the 30 seats on SpiceFlex or one of the 24 premium seats on IndiGo?
I was hoping that Vistara sticks to a 12J configuration, which is easy to fill up even during mid-day and gives a lot of economy seats which can be filled up at leisure destinations to be operated during the non-peak times. The configuration of 12J & 144Y would have given them enough capacity on the metro routes, and had a fair chance on the non-metro routes. There is no making money in the morning and losing that in the afternoons. With aggressive Jet airways, the market for the front cabin will only get more competitive from here on. Premium Economy is a new concept and will take time to sync in. To make money, Vistarawill have to price it minimum 1.5 times the economy fare and finding clientele for that definitely is a challenge.
In India, there is no cost attached for the novelty factor and one such example was how the Meh Air planes from Mumbai to Lonavala were full at 3000Rs each way, while the Mumbai – Pune service goes empty at fares below that. And hence Vistara should expect a lot of traffic in the initial days who will say, “full service wapis aa gaya”, “ purine dino ki yaad aa gae”, “ achi service thi” But will this lot be loyal or it will still be swayed by aggressive pricing of LCCs is what only time can answer. As for me, I think I will opt for the cheaper option and so would my office to send people between two cities.
As always, wishing all airlines in India – Good Luck !