Vistara's Merger In Air India Changes Indian Aviation, Carriers Strive To Capture The Industry

Vistara's merger in Air India has turned out to be one of the most complicated deals in aviation sector globally, including navigating the pilot strikes that resulted in mass flight cancellations

Competition in the Indian aviation industry has intensified. With Vistara merged in Air India, the dynamics of the sector have majorly changed. Vistara will operate its final flight on Monday, while the redefined Air India will kick in on Tuesday.

Further, on Thursday, IndiGo, which controls the largest share in the domestic industry, will debut its business class cabins certain routes as the airline goes beyond budget travel for the first time. 

The merger of Vistara into Air India has turned out to be one of the most complicated deals in aviation sector globally as it also included navigating the pilot strikes that resulted in mass flight cancellations this year, reported Bloomberg.

Now, this deal will be an important test of how the Tata Group works on improving the quality of Air India’s services and turns out the carrier from a loss-making entity into a profitable venture.

The report quoted Ajay Awatney, founder, LiveFromALounge.com, and said, “All the jabs that Air India and IndiGo are taking are aimed at each other’s strategy. It’s now a two-player game.”

The merged new entity will place 210 jets under the Tata Group, with additional 470 aircraft on order from Boeing and Airbus SE. The new carrier will now control a 25 per cent share in the Indian aviation market, while IndiGo accounts for a 62.5 per cent share in the space.

Notably, Air India has been in the news this year for its customer service which has failed to impress fliers. Now, concerns remain if the carrier can match the standards set by Vistara for the passengers.

IndiGo's New Offerings

At the same time, IndiGo with its ‘IndiGo Stretch’ business seats on select routes plans to capitalise on the luxury market and has already launched a new loyalty program. Premium travellers on IndiGo flights will get benefits such as priority check-in, additional baggage allowance, and a 5-inch recline seat, among other features.

However, these attractions might not be enough to lure in customers who are used to better services while flying in business class cabins, the report said. Sidharath Kapur, Board Member, Noida International Airport, stated, “IndiGo had a hole in its operations because they were missing out on a section of the customer which fly business class. But I don’t think Indigo would be able to compete at a full-fledged business-class airline kind of product. I would say hardcore business class travelers would continue to be loyal to the full-fledged airline.”