Vistara Slashes Fares to Take On Rivals

Thursday, 22nd January 2015 at 02:04am

The latest airline to enter India's huge travel market, Vistara doesn't cringe in fear when it comes to taking on its bigger and more established rivals.

The new start-up, the brainchild of Tata Sons with its joint venture with Singapore Airlines, is offering its customers cheaper tickets than its rivals to grow its market base in India.

Vistara launched its commercial operations on January 9 this year with the inaugural Delhi-Mumbai flight.

In an effort to build up its market base, the airline slashes its one-way fares by almost half the price it offered during its inaugural flight.

On the Delhi-Mumbai route, for example, one could book a ticket for only Rs5,481 if booked one month ahead of the departure date. The price for the same flight on the same route last week was Rs.10,700 which is still lower than most of its rivals.

The carrier is not yet planning to join in the fare war that existing airlines in India constantly engage in to lure customers especially during the lean season. The year's first lean season starts toward the end of January until April.

According to India's largest travel website, Makemytrip.com, Vistara is able to grow its market share steadily in such a short period since it commenced operations last January 9. Its spot fares are very competitive compared to its rivals, fellow full-service carriers.

As shown in Makemytrip website, Vistara's one-way ticket on the Mumbai-Delhi route is offered for Rs.9,398 which is Rs.200 more expensive than low-cost carrier, GoAir.

Based on a report published on Monday, the country's travel agents were selling a total of 300 Vistara tickets every single day. The volume is one fifth the daily inventory offered by the airline.

The poor ticket sales performance by the new airline might be the result of its lack of pricing strategy. The low take-up rate is partly blamed on the massive discounts offered by Air India during the same period with tickets valid for travel until April 30.

Vistara operates from its hub in Delhi with a combined 10 daily flights to and from Mumbai and Ahmedabad.

It will also launch service to Goa and Hyderabad by February 20 and March 1, respectively.

By: Pete Lee.