Vistara – the joint venture of Tata group and SIA which is all set to merge with Air India had a turbulent April. No sooner had the schedule moved from Northern Winter to Northern Summer on March 31, 2024; there started a spate of delays which ranged for hours followed by cancellations. Reports indicated that pilots went on sick leave as a mark of protest against the terms offered while merging with Air India. These reports could never be verified nor confirmed by the airline, but the airline came out acknowledging an “operational” issue and apologised to its passengers.
The airline cancelled flights and pressed the 787-9 dreamliner in service on some routes by cancelling and combining flights to ensure maximum passengers can be accommodated on the same day of travel, albeit with some change in timings.
Eventually, the airline said it would cancel anywhere between 25-30 flights a day for the rest of April, most of which has also continued in May. This, the airline said, would ensure schedule adherence and not impact passenger service. After disastrous first few days of April, the airline closed the month with an On Time Performance which was better than IndiGo.
What do the numbers say?
Granular data released by the Directorate General of Civil Aviation (DGCA) shows that the airline operated 8265 domestic and 1556 international departures in March. This translates to an average of 266.6 domestic and 50.1 international departures per day in March.
In April, the airline saw 7971 domestic and 1508 international departures, which translates to 265.7 domestic and 50.2 international departures on an average. Essentially the international departures remained the same while domestic dropped by just one a day.
So how exactly was it a drop? The airline had approval for 1902 weekly domestic departures in the Winter schedule and the airline was almost exceeding that in most cases. Exceeding the approved schedule is normal, with airlines applying for additional slots as the season progresses. In February, the last full month of operations for the Winter schedule, the airline operated an average of 1909 weekly domestic flights.
For the summer schedule, the airline has approval for 2324 weekly flights, a 22.18% increase over the previous schedule. The increase was for a reason. The airline had inducted additional aircraft over the last few months and was ideally in a position to add flights. It had already announced multiple flights which included flights to Kolkata, Dehradun, Udaipur, Trivandrum and Ahmedabad from Bengaluru, amongst others.
This would have translated to 332 average daily departures. Typically, an airline does not operate the full quantum of flights from the very first day of the schedule, since the schedule also includes flights which will gradually start over the next few weeks.
Essentially this means that Vistara lost out on the growth and the momentum it had created leading up to the peak summer months. It had to revert back to its flight count of the previous month and since it had approvals and plans for a larger schedule, it also had the aircraft – which now lay underutilised as compared to its plan, leading to a possible loss in revenue.
How did the passengers respond?
The airline lost 0.4% market share, which largely went to Air India and Air India express – whose combined share went up to 14.2% from 13.1% a month ago. Vistara also saw a drop in passenger load factors, dropping to 90.9% in April, compared to 92.4% in March. In fact, while April marks the beginning of the peak season, this was the lowest load factor for the airline in 2024.
Tail Note
Vistara in April, Air India Express in May – the Tata group of airlines have been marred from one issue to another. The group had envisioned the mergers long back. When SIA group announced the merger and acquiring stake in Air India, it had kept March 2024 as its expected completion date. A mix of legal and non-legal processes have kept the mergers away. The one between AirAsia India and Air India Express is not yet complete, with AirAsia India renamed as AIX Connect and the planes sporting red livery minus the AirAsia branding,
The passenger has been at the receiving end for far too long, with capacity out of the market for one or the other reason and that leading to a spike in airfares while airlines report record breaking profits.
Will Vistara be able to woo the passengers back? The airline does not have a long runway left for itself as it merges with Air India, but the way to woo passengers has always been by ensuring their pockets remain heavier and that means dropping the air fares. While this will translate into good load factors, it may not translate into good revenues. How did Vistara manage to do it? We will never know as the airline is not listed and has no obligation to declare its finances.
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