India-based Vistara to take on Gulf carriers

A Vistara passenger plane prepares to land at Chhatrapati Shivaji International Airport in Mumbai, India. The airline, a joint venture between SIA and India's Tata Sons, plans to buy or lease more aircraft for long-haul routes in order to fly abroad
A Vistara passenger plane prepares to land at Chhatrapati Shivaji International Airport in Mumbai, India. The airline, a joint venture between SIA and India's Tata Sons, plans to buy or lease more aircraft for long-haul routes in order to fly abroad under India's relaxed aviation policy.PHOTO: REUTERS

NEW DELHI • Within weeks of India easing aviation rules, Singapore Airlines' (SIA) local venture is charting a course to take on carriers from the Middle East. It is counting on a surge in international traffic from the world's fastest-growing major air-travel market.

Vistara, in which SIA owns 49 per cent, is considering buying or leasing wide-bodied aircraft for long-haul routes and will seek funds from its owners to finance the purchase, chief executive officer Yeoh Phee Teik said in an interview last Friday.

Vistara, which has 11 planes in its fleet and is co-owned by India's Tata Sons, needs at least nine more to fly abroad under the relaxed policy. The number of international travellers from India is poised to grow tenfold to 500 million by 2050, according to a CAPA Centre of Aviation study that was commissioned by Vistara.

The carrier's plans may be the start of a fresh challenge for Emirates and Etihad Airways, which have long been the biggest foreign carriers in India and have, along with Air India and Jet Airways India, dominated the market for offshore travel.

"We believe Vistara may pull out all the stops to get to the '20' number and fly overseas," said Mr Amber Dubey, the India head for aerospace at KPMG. "Being an Indian carrier, it will have the advantage of providing non-stop flights from India to the European Union and United States, something that Gulf carriers can't do."

Prime Minister Narendra Modi's Cabinet ratified its policy changes in aviation on June 15, permitting domestic airlines to fly overseas, provided they deploy 20 planes or 20 per cent of capacity, whichever is higher, on local routes. Earlier, carriers needed to have a minimum of 20 aircraft in their fleets and five years of domestic services.

"The world is our oyster now; we are spoilt for choice," Vistara's Mr Yeoh said. "We can be East-bound, West-bound; we can be short-haul or long-haul from New Delhi."

The wide-bodied planes Vistara is considering would be in addition to the 20 it would have by June 2018 after leasing company BOC Aviation delivers nine more jets from Airbus Group's A-320 family, Mr Yeoh said.

Vistara is "seriously looking" at advancing the delivery schedule of those nine aircraft to enable overseas flights sooner, he said.

SIA remains open to all options on funding Vistara, the carrier said in an e-mail response, without elaborating. Tata Sons referred queries to Vistara.

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A version of this article appeared in the print edition of The Straits Times on June 29, 2016, with the headline 'India-based Vistara to take on Gulf carriers'. Print Edition | Subscribe