Vistara’s all economy aircraft – eternal double edged sword

• Poor utilisation and deployment challenges continue

• Some routes have exclusively moved to all economy offerings but confusion remains on few

Vistara’s fleet and LOPA (Layout of Passenger Amenities) has been a keen interest for me since its inception. Having tracked the airline closely, I have got a few things right – prediction on the fleet and widebody network being some of it. The airline’s initial LOPA was a failure. The airline subsequently spent valuable efforts and resources along with money to reconfigure the aircraft, not once but twice and this when it came to the market with conviction that it could push up fares and attract passengers for the great food and comfort.

Things took a turn in 2019, when in an effort to grab slots vacated by Jet Airways, it inducted a handful of B737s (in two class configuration) and a mono class A320. As it stands today, the narrowbody aircraft fleet comprising over 50 aircraft is a mix of A320ceo, A320neo, A321neo and B737NG. But the seating mix is more complex. 

Operating all economy aircraft while trying to position itself as a premium full service carrier is always a challenge but the market dynamics in India are such that there is a long list of stations where there isn’t enough demand to justify Business class. While its first mono class aircraft operated double daily flights to Kochi from Delhi, subsequent inductions have seen a mix of services on routes with one frequency served with three class aircraft and another with mono class. Not just non-metro cities, as recently as last month the airline operated one frequency on Mumbai – Bengaluru – Mumbai with all economy aircraft.

Current deployment

The airline has seven all economy aircraft in its fleet, four of which are based in Delhi, two in Bengaluru and one in Hyderabad. The utilisation though is extremely poor. It could well be the lean season but having tracked these aircraft over the past four months, the utilisation or route selection has always been a challenge or so it seems. While the Delhi based aircraft are a little better, the southern ones are extremely poor, more so after withdrawal of Bengaluru – Coimbatore.

One aircraft operates just four flights a day with twice daily service to Pune. The route does not see any other full service carrier or a single seat in premium classes. The other Bengaluru base aircraft operates flights to Hyderabad and onwards to Chandigarh – which is a non daily flight. This aircraft swaps base with the Hyderabad aircraft which operates Hyderabad – Bengaluru – Guwahati and back followed by Bengaluru – Indore route which is a four weekly service. At an average of 8hours and 45 mins, this is the aircraft with maximum utilisation amongst the three in South India.

Up North, the airline has moved flights to Indore, Ranchi, Dehradun and Raipur to all economy after some experimentation and mix-and-match in the past. The service to Dibrugarh via Bagdogra has moved to all economy from three classes in the past. This would allow the airline to garner additional Category 2 and 2A ASKs (Available Seat Kilometres) helping with the mandatory Route Dispersal Guidelines (RDG). Its sole frequency on Delhi – Trivandrum is an all economy aircraft but there are two routes where the mix still continues.

The airline operates double daily flights to Kochi and Srinagar, with one of the two frequencies being all economy and the other on three class configuration. With the mix restricted to just two sectors, this has been a monumental jump from how the aircraft were deployed previously. The utilisation from Delhi base is higher too with the aircraft operating flights to Trivandrum and Kochi recording just 4 flights a day but an average daily utilisation of 12 hours and 30 minutes. 

Not the first time

Kingfisher Airlines had its own all economy aircraft and inherited a few after acquisition of Air Deccan. Both Jet Airways and Kingfisher experimented with low cost offerings or an airline within an airline concept. Both failed. Vistara started offering Buy-on-board service offering, like a fourth class of service within the same aircraft. While I am a supporter of the sub-fleet concept for the kind of flexibility it provides, there is an eternal conflict between simplicity v/s flexibility and in the case of FSC’s there comes another angle of brand dilution.

It is an eternal question on how and why Full Service carriers go this path. Air India did not go the BoB route though mono class aircraft have been a feature with Air India as well. As for Vistara there also is an angle of curtailed service levels on shorter flights putting a question mark on the “full service”. Does it really help compete with LCCs or can it push up the service levels and charge a small premium? Sadly the answers are ever changing based on the market making life difficult for the airlines.

Network Thoughts

For an airline which goes to the market as a premium carrier, the all economy aircraft becomes the talk of the town even from those who are not planning to fly premium cabins! But there are typical questions that need to be answered and most come with a double edged sword. For example, Vistara has an opportunity to be the only carrier to offer premium cabins on the Bengaluru Pune sector but instead it has opted to go all economy, even as they remain the only FSC on the sector.

1. Does the route have premium demand?
   1. If yes, can it help fill the Business and Premium Economy cabin
2. Will it create confusion in the minds of passengers?
3. Does deploying all economies help take on competition?
   1. Having nearly same seats as competition and helping sell at lower rates
4. What is the route profile like?
   1. Right mix to breakeven
5. Does it help in any other way like Route Dispersal Guidelines?
6. Connecting traffic?
   1. What if the connecting traffic is premium?

Most of these questions are answered with calculations in excel and I often keep saying “what makes money in excel, often loses money in real life; what doesn’t make money in excel seldom makes money in real life”

As for the poor utilisation, media (and social media) reports have indicated that the airline will soon start services to Surat and Jaipur. Could the gaps in aircraft rotations at Bengaluru and Hyderabad be utilised for connecting these places? Time will tell. . .

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