SIA's Indian carrier offers free tickets amid stiff competition

Vistara has a three-class tier which comprises business, economy and premium economy - a class it pioneered in the domestic Indian market.
Vistara has a three-class tier which comprises business, economy and premium economy - a class it pioneered in the domestic Indian market.PHOTO: SIA

NEW DELHI • Singapore Airlines' premium Indian carrier Vistara has resorted to free tickets as intense competition and low fares add to the task of wooing passengers.

Vistara, jointly owned by Singapore Airlines and Tata Sons, filled about 59 per cent of seats on average in the first half of this year, government data shows. That is the least of eight major passenger carriers operating in Asia's third-largest economy. SpiceJet, which last year offered base fares as low as 1 rupee (2 Singapore cents), filled more than 87 per cent.

Vistara last Wednesday offered a free premium economy class ticket - a tier it pioneered in the domestic Indian market - with every business class ticket purchased. Vistara did not comment on whether the move is aimed at filling more seats.

Given Vistara's three-class configuration of business, premium economy and economy, "it's too simplistic to look at the load factors relative to airlines with a single class, high-density configuration of 180- plus seats", chief commercial officer Toh Giam Ming said in e-mailed responses to questions.

Indian companies are already adding Vistara's premium economy as an option in their employee travel policies, he said. Its load factor rose to 71 per cent in May from 53 per cent in March, he said, adding the airline's fleet will expand to nine from six in the next three months.

Vistara will continue to see near-term pressure on premium economy yields, said Mr Kapil Kaul, South Asia chief executive officer for Sydney-based Capa Centre for Aviation. "Making premium economy work is critical," Mr Kaul said. "Otherwise, a configuration correction will become necessary."

Singapore Airlines shares fell 0.7 per cent as of 1.34pm. The stock has dropped 13.5 per cent this year.

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A version of this article appeared in the print edition of The Straits Times on August 18, 2015, with the headline 'SIA's Indian carrier offers free tickets amid stiff competition'. Print Edition | Subscribe