Vistara to begin operations on Delhi-Mumbai route, tickets starting Rs 7,502

At a time when the aviation sector is going through a rough phase, a new airline called Vistara is ready to take off. The full-service carrier was expected to start operations by mid-October. But the delay in getting flying permit from aviation regulator Directorate General of Civil Aviation (DGCA) resulted in Vistara pushing forward its launch date to January 9, 2015. Last week, the airline launched online booking for three cities - Delhi, Mumbai and Ahmedabad.

The airline has already taken delivery of two planes - Airbus A320-200 - and has plans to operate 20 aircraft in the next four years. The 148-seater plane configuration is divided between business (16 seats), premium economy (36 seats) and economy class (96 seats).

The cheapest fare - economy class - for Delhi to Mumbai sector (on opening day) is Rs 7,502 (per passenger). Vistara also offers premium economy (a new concept in India) and business class seats. In comparison, Jet Airways' and Indigo's lowest fares on the same route (and same day) are Rs 6,268 and Rs 5,402, respectively.

Vistara's business class travel (for the same day) costs Rs 32,347. The company claims that its business class seats (with 42-inch pitch) are the largest of any domestic airline.

In the segment, Vistara will be competing head on with Jet Airways, which is also trying to get business-class passengers.

Vistara aims to change its meal menu every week and there are some 17 'special' meals to choose from. The airline's loyalty programme will enable customers to earn points on the basis of money spent, instead of miles travelled.

Initially, Vistara is expected to take away some market share from the troubled SpiceJet, which is facing funding issues. But in the long term, the airline has to create its own market of high-value customers.

Phee Teik Yeoh, CEO, Vistara, says that the airline has carried out an in-depth consumer research that shows a huge market for business class travel in the country. "We have made significant investments in the airline and will be managing costs tightly which is very important in the airline business," he says.

Vistara's launch is expected to be followed by that of Air One, another full-service carrier promoted by Alok Sharma, former president of Air Sahara.

Today, the business class capacity stands at a meagre 3.5 per cent of the total air travel capacity, according to estimates. Experts say that even with the entry of two new full-service carriers, the market for business class travel will continue to remain limited.