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Old 12th January 2015, 01:35   #16
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Default Re: Vistara: Tata's new commercial airline

Best of luck, Vistara. Most people in the country have forgotten what it is like to fly a full-service airline, thanks to the 'budget' boom that has left us with a bunch of airlines that charge premium rates and provide a less-than-budget experience.

"Budget airline"s are a scam. The sooner the travelling public realise this and give them a quick sendoff, the better.
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Old 12th January 2015, 10:18   #17
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Default Re: Vistara: Tata's new commercial airline

I think the mantra here for Vistara is to understand that there will be losses for a while and they will be looking up to the parent company to consolidate their position in the business. As time passes, this thing can materialize for them.

I always thought that TATA will take over Kingfisher atleast their assets that is until I heard much more about the deep ravine that Kingfisher was in.

If you see, TATA will be well off in this business if they put up a mandate that all its businesses can only fly on Vistara. They have an excellent customer base!

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Old 12th January 2015, 10:50   #18
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Default Re: Vistara: Tata's new commercial airline

The problem is with rat race that prevails in the Indian market. In many regions (especially Europe), the low cost airlines do not fly from main airports and use sub-urban / less crowded airports for their operations resulting in better management of their finances.

Indian sub-continent for one permits no-frills and full service to make use of the same facilities (barring Delhi with different terminals) resulting in increased financial burden on LCC and at the same time reduce the service offering difference between LCC and Full Service Airlines.

The regulators need to understand the market dynamics for both players and in the growing demand for air services in the country. Age old rules like no other airport within 150 air-km of an operational airport are to be given up and regional aviation to be promoted. Once these changes take place, the market will mature in a different pattern and no-frills might limit themselves for domestic market instead of venturing international routes which put pressure on their operational economics.

Also, common ground service provider companies will have to increase their reach in India which is very much present in the Nordic countries resulting in optimum utilization of ground fleet. Take for example Vistara, with just 3 flights from Delhi in a day as of now, their ground fleet is a burden on them in terms of under utilization and salary payout.

A third party service provider for ground services is an option, provided there are several available in India. There are just one / two such third party ground fleets in India which are used by players like Druk Air (Bhutanese Airlines uses Khambata) and that too without any competition.

This has to change if Indian government wants to see a progress and healthy operational margins for operators in this sector.

Good luck to Vistara.

Last edited by i74js : 12th January 2015 at 10:52.
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Old 12th January 2015, 12:39   #19
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Default Re: Vistara: Tata's new commercial airline

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Originally Posted by GTO View Post
Few people know / remember that our beloved Air India is actually Tata Airlines (post-nationalisation of the same) `
Actually even fewer people know that under JRD Tata Air India was one of the best airlines in the world in 60s.
It was actually first airline in Asia to enter jet age by inducting Boeing 707–420, named Gauri Shankar in 1960. It was doing well even after partial nationalization but the rot started after government snatched management control from JRD.

Another factor in decline of Air India was constant terrorist threats and sabotages it faced being flag carrier or India thus marring the safety records.


PS : Tata's entry in aviation was blocked multiple times by vested interests.Actually Ratan Tata revealed couple of years back that he gave up his dream of airlines in partnership with SIA after a union aviation minister made some demands in 1996. Going by timeline minister in question should be CM Ebrahim.

Last edited by amitk26 : 12th January 2015 at 12:47.
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Old 12th January 2015, 17:30   #20
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Default Re: Vistara: Tata's new commercial airline

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I hope Vistara survives. I find it hard to understand why people venture into this airline business - we have so many who have folded up in India in the past decade. I am not sure how many of the operational airlines make any profits each quarter.
No airline operating in India is making profits the exception being Indigo. All the other airlines have pretty big losses. But the losses are not happening because of lack of patronage; they are happening despite good patronage. That means that it is not as if people are not interested in travelling by planes. It means that there is something seriously wrong with the way in which planning and budgeting is being done by the airline companies. The best example being Mr. Sanjeev Kapoor's idea of selling food on the airline (through advertisements) and not the airline itself.

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Originally Posted by GTO View Post
Few people know / remember that our beloved Air India is actually Tata Airlines (post-nationalisation of the same) `

Vistara is backed by a group with incredibly deep pockets, so they'll never see the kind of cash crunch that Kingfisher and - more recently - SpiceJet faced. Tata is also an expert in operations...the airline industry requires operational brilliance for success.

Plus, their differentiator is 'full service'. No one knows hospitality better than Tata (Taj Hotels), while Singapore Airlines has a stellar reputation for quality too.

I personally think the timing couldn't have been anymore perfect for Vistara. You can count the strong players on your fingers, many have vanished, and few have the inclination to enter the segment.

Good luck, Tata!
Believe me Sir, even Kingfisher started with very deep pockets but emptied them pretty fast. The whole idea of capitalised billing of a group indicating deep pockets is usually a myth, since for example profits from Tata Steel will not be pumped into losses from Tata Motors. Tata has started spreading itself thin by simultaneously investing in Air Asia and in Vistara. Some may see this as spreading the risk others as insurance against loss. Which of this is true only time will tell. I do not think the Taj Hotels are the best in hospitality; that is very contentious and to be the best of my knowledge no one has ever done a survey to find out who were the best in that field anyway.

Air India having once been Tata Airlines is nice historical trivia but that has nothing to do with the airline reality of today. Incidentally somebody said on this thread that Air India with the Boeing 707 in service was considered the best in the world. I hope you do not believe that; it is simply an urban legend. Tata were pioneers in many things in which they no longer figure as market leaders. But Singapore Airlines can make a difference provided they understand the mindset of the Indian consumer, something which has completely baffled players who are leaders in other markets.

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Originally Posted by kamboj View Post
Only Indigo and to some extent Go Air are in good health. Not sure about how Air Asia is shaping up.

Another major factor is recent crash in fuel prices. Remember fuel costs are biggest chunk of airline operating costs. While it will benefit all players, but unlike others, Vistara does not have its balance sheet affected by high fuel prices from last few years.
Go Air too was served notice by the DGCA and were threatened to put on the cash and carry list for fuel at airports. They are in pretty bad health. Air Asia has some two or three planes as will Vistara to begin with which means they are both testing waters. Airplane engine grade kerosene may be down now but when it goes up the pressure will be felt and then it will be of no significant advantage.

I think the strategy of Vistara is to take slow, understand the market and then kick things along depending on circumstances. That could be a good strategy.
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Old 13th January 2015, 01:25   #21
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Default Re: Vistara: Tata's new commercial airline

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Originally Posted by sadsack View Post
Believe me Sir, even Kingfisher started with very deep pockets but emptied them pretty fast. .
Kingfisher spend money like a drunk Arab in a Vegas casino!!

They started with not one or two, but 4 new A320s no less. Even before completing the 1st year of operations they went ahead and booked a fleet of A380s (I think close to a dozen!!). In their hurry for an international route license they took over Air Deccan and never recovered!!

In less than 10 years in operation Kingfisher had a fleet of nearly 70 aircraft and an order for nearly 40 more from Airbus! It would have been more profitable to make paper planes out of Rs.1000 notes and then set them on fire!!

Tata has bought about a semblance of sanity in this start up venture. They have some experience of running a premium air service. Since 2002 Taj Air has been operating chartered services in India with a fleet of executive jets.
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Old 13th January 2015, 09:13   #22
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Default Re: Vistara: Tata's new commercial airline

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Originally Posted by sadsack View Post
The whole idea of capitalised billing of a group indicating deep pockets is usually a myth, since for example profits from Tata Steel will not be pumped into losses from Tata Motors. Tata has started spreading itself thin by simultaneously investing in Air Asia and in Vistara.
I agree that profits from 1 unit cannot cover the losses from another unit directly. However, they can partially offset by providing special rates in case there are dependencies. For example, the catering by Taj Hotels can be provided to Vistara at a very attractive rates and labelled as "brand marketing" expense.

The primary differences between the premium airlines and budget airlines to me are the packing factor of the seats, dining experience and in-flight entertainment experience provided. Considering majority of the airlines are never full, the packed seating of budget airlines is not really helping them much and Tata can still do break-even by charging a slight premium and giving better seats. Exception is Indigo which is mostly near-full and hence they are in profits.

Dining option @ 300-400 extra is not something that most customers are reluctant to pay either, if you charge it indirectly to the ticket and claim it as a free meal. In-flight meals in Indigo is not really so bad compared to what is served in some international flights, if you are willing to pay ~300 to purchase the meals.

However, in-flight entertainment is a costly affair, considering the effort in maintaining those electronics as well as the cost for the rights of the latest movies that cater to different tastes etc. However, Vistara is not providing this part - that makes them a "quasi-premium" airline, just like the smaller Kingfisher flights were in the past. Unless they introduce in-flight entertainment, they are not true premium flights. However, that is the piece that breaks the back for most airlines and is best avoided in the domestic sectors to ensure that the balance sheet remains green.
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Old 13th January 2015, 18:07   #23
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Default Re: Vistara: Tata's new commercial airline

Shared by P V Subrahmanyam

Long long ago...when my uncle was standing in an airline check in counter. One man came and stood just behind him. One girl at the counter came and said to him "Sir may I help you check in" ..He said "Sure, after you have checked in the 7 people standing before me". No prizes for guessing: Air India, Pre nationalisation. The man? Obviously J R D Tata. Vistara comes with such awesome expectations. All the best Vistara, hope you do a great job.
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Old 13th January 2015, 22:57   #24
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Default Re: Vistara: Tata's new commercial airline

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Originally Posted by Latheesh View Post
Shared by P V Subrahmanyam

Long long ago...when my uncle was standing in an airline check in counter. One man came and stood just behind him. One girl at the counter came and said to him "Sir may I help you check in" ..He said "Sure, after you have checked in the 7 people standing before me". No prizes for guessing: Air India, Pre nationalisation. The man? Obviously J R D Tata. Vistara comes with such awesome expectations. All the best Vistara, hope you do a great job.

Good! Funny side of it is that he might understood that all passengers fly and land at the same time. Sorry- Bit off topic but I just can't understand the need of long queues and people start queing even before announcement of boarding. Situation become more scary at landing when you know everyone would be again meeting at baggage conveyor.

Coming to Airline profitability- I believe as per Avitiation ministry guidelines- Airlines have to fly non core (non profitable sector) with a profitable one. I have never seen flights between Mumbai, Pune, Banglore, Delhi going less than 80% capacity- no points for guessing that Kingfisher can still be profitable if it ply on above routes. But problem starts when they have to fly on routes like Ahemdabad, Jaipur, Chandigarh, Lucknow etc.

If you can see Vistara is offering Delhi, Mumbai and Ahemdabad.
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Old 14th January 2015, 03:38   #25
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Default Re: Vistara: Tata's new commercial airline

It's good to see Vistara being launched as a full service airline. Too many so called budget airlines have sprung up that were financially not viable. But, there are very few players in the full service Indian domestic market. I think Vistara has the potential to succeed. As always, the big elephant in the room that is causing the Indian aviation to struggle is Air India with their unlimited cash infusion inspite of huge losses for decades.

I sincerely hope that Vistara provides good service worthy of a premium full service airline and it may get a strong foothold in the Indian aviation segment.
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Old 14th January 2015, 07:32   #26
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Default Re: Vistara: Tata's new commercial airline

I wish all the best to Tatas for their new airlines. The timing is perfect as the ATF has never been cheaper than it is today. I do not understand how someone can compare legendary Tatas with this kid Maran (compared to Tata, that is). One is over-hundred-years old industrial house spanning three generations with diverse products and services and the other person is a politician. Politicians' declared assets are generally in lakhs while their dubious illegal wealth runs into crores. Absolutely no professionalism here. They generally sink as fast as they rise. And comparison with Mallaya is unfounded too. Tatas simplicity is renowned while Mallaya's flamboyance , opulence, showmanship, extravaganza, calendar girls, Monet Carlo connection, yachts etc. etc. is well chronicled, too. Spice jet is history. I had booked tickets for 25th Dec for Vizag-Mumbai flight which has since been cancelled. Till date even my fare is not refunded. So much for this Maran business group. I had to book on Indigo last minute paying high fare. Calls made to Spicejet call centre are of no avail. I would be happy to see such airlines sink. I think post shake up, only Vistara and Indigo will rule the skies.
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Old 14th January 2015, 11:29   #27
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Default Re: Vistara: Tata's new commercial airline

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Originally Posted by sadsack View Post

Believe me Sir, even Kingfisher started with very deep pockets but emptied them pretty fast. The whole idea of capitalised billing of a group indicating deep pockets is usually a myth,
In case of conglomerates it is not a myth. Take example of Corus steel acquisition by Tatas . It was a 9 billion $ deal ( final total valuation 12.4 billion $ for combined equity) and was funded by 3.5 billion $ from Tata Steel and 5.6 billion $ as long term borrowing from international agencies.

Now question to be asked is why some international banks would give loan of 5.6 billion $ which was more then total equity of Tata Steel ?

The answer lies in repaying capacity of the Tata group and their clean financial image. Tata sons the parent holding company had more then 85% equity holding in TCS at that point which was sitting on a cash mountain and was one of the largest company in terms of market capitalization.

Theoretically if ever the business condition turns sour Tata Sons can dilute holding in TCS and pay off debt and increase equity in Tata Steel and this was the reason international lending agencies have no problem in giving huge loans to Tatas.

Same thing was repeated in the case of JLR take over by TML.


There is no comparison between Mallya and Tatas . Primary source of funding was for Mallya was banks in India and these loans were sanctioned purely due to political influence.



Quote:
Originally Posted by zenren View Post

However, in-flight entertainment is a costly affair, considering the effort in maintaining those electronics as well as the cost for the rights of the latest movies that cater to different tastes etc. However, Vistara is not providing this part - that makes them a "quasi-premium" airline, just like the smaller Kingfisher flights were in the past. Unless they introduce in-flight entertainment, they are not true premium flights. However, that is the piece that breaks the back for most airlines and is best avoided in the domestic sectors to ensure that the balance sheet remains green.
I am not insider to Airlines industy but I feel biggest costs are cost of capital , airport landing charges , fuel and staff costs.
Out of these Indigo keeps the cost of capital and staff costs low by turning around planes in less then 20 minutes ( Aircraft flying more means lesser planes to be leased / purchased and lower staff cost per flight).

Out of these Tatas may be able to keep cost of capital low as compared to others however until they until they choose tier 2 airports they can not reduce operational costs any further then indigo.

Last edited by amitk26 : 14th January 2015 at 11:31.
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Old 14th January 2015, 12:03   #28
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Default Re: Vistara: Tata's new commercial airline

Here is an interesting trip report. The author is a veteran of Vistara and his opinions are highly respected. A very well written review

http://www.airliners.net/aviation-fo...d.main/261355/
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Old 14th January 2015, 14:16   #29
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Default Re: Vistara: Tata's new commercial airline

Hi guys, I was on the inaugural flight too and this is my trip report posted elsewhere

http://www.flyertalk.com/forum/trip-...m-economy.html
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Old 14th January 2015, 14:31   #30
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Default Re: Vistara: Tata's new commercial airline

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Originally Posted by zenren View Post
The primary differences between the premium airlines and budget airlines to me are the packing factor of the seats, dining experience and in-flight entertainment experience provided.

However, in-flight entertainment is a costly affair, considering the effort in maintaining those electronics as well as the cost for the rights of the latest movies that cater to different tastes etc.
Spot on ! This is what broke Kingfisher's back.

If you remember, around the time of 2007 cricket world cup, Mr. Mallaya insisted (emphasis supplied) that all Kingfisher flights should be equipped with 'live TV', so that guests don't miss the telecast. Despite such in-flight entertainment costing at least 30-40% more than regular, pre-recorded in flight entertainment.

Add to that, the lavish spread and other amenities on a Kingfisher flight which, while they lasted, made you feel truly special. I once traveled from London to Bombay in Kingfisher business, and was give a Ferragamo toiletries, bags and even a tie ! It was a definitely a good time while it was on.
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