NEW DELHI: India’s newest airline announced yesterday flights could begin in October, saying it was “bullish” about the future even as a rival carrier reported a big loss.
The new airline, to be called Vistara — a Sanskrit word meaning “limitless expanse” — is 49-percent-owned by Singapore Airlines, while the Mumbai-based Tata conglomerate controls 51 percent.
The airline will offer both business and economy class, new Chief Executive Phee Teik Yeoh told reporters in New Delhi, and hoped to start flying passengers “sometime in October”, subject to approval by India’s Directorate General of Civil Aviation (DGCA).
The previous Congress government began allowing foreign airlines to buy up to 49 percent stakes in Indian carriers in 2012.
India’s air passenger market has expanded at breakneck speed but many companies are laden with debts and beset by cut-throat fare wars, high fuel costs and shoddy infrastructure.
India’s second-biggest carrier by passengers, Jet Airways, in which Abu Dhabi-based Etihad Airways owns a 24 percent stake, reported yesterday it lost Rs2.2bn ($36m) in the three months to June 30. To help stem losses, Jet announced it was abandoning its low-cost JetLite brand to focus on its full-service business as it gears up for battle with Vistara in the higher-paying segment. “We welcome the Tata-Singapore airline to India, it will help us stay slim and not drop our guard,” Jet Chairman Naresh Goyal told a late evening news conference.
The Centre for Asia Pacific Aviation consultancy estimates the industry will lose $1.3-1.4bn in the financial year to March 2015 after losing $1.7bn in 2013-14.
IndiGo, India’s largest passenger carrier, is the sole airline among the four biggest currently operating to consistently report profits. Kingfisher, another full-service airline owned by liquor tycoon Vijay Mallya, was grounded by huge losses in 2012.
But Vistara’s new chief executive projected a strong future for the new carrier thanks to India’s fast-growing middle class.
“The Indian aviation sector is on the cusp of change,” he said, saying the company was “very bullish about the future” thanks to low air-travel penetration in the country of 1.25 billion.
Air trips per person each year in India stand at just 0.07, far behind developed countries such as the United States with 2.49 air trips annually.
Vistara will take delivery of its first plane, an Airbus A320-200, in September, and will have five aircraft by December. It plans to increase its fleet to 20 by the end of its fifth year in business.
AFP
