Global market trends

NASDAQ Composite and S&P 500 fell 1% each, while Shanghai Composite advanced 4%. Nikkei and the FTSE declined 4% each.

 

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Tata Group returns to the Airline space, which it helped take birth

The launch of new airline Vistara, will be a proud day for the Tata group, which pioneered the airline experience, more than 60 years ago

 

After having obtained the Air Operating Permit (AOP), Vistara have announced that their inaugural flight from Mumbai to Ahmedabad will take place on 9th January 2015, with two narrow-body Airbus A 320 planes and they plan to reach a fleet of 5 aircraft by March, 2015. New Delhi is confirmed as their hub, and full route details are expected to be announced shortly.
 
This will be a proud day for the Tata group, which pioneered the airline experience, more than 60 years ago. Tatas' venture was taken over by the Government of India to form Air India International.
 
Vistara will be able to carry a full load of 148 passengers on their flights in A 320-200s and they are expected to offer business, premium and economy classes.  The premium segment will have more leg space and a baggage allowance of 20 kgs as against 15 kgs in economy class. As a full service carrier, they will cater to the needs of the exacting traveller and hope to offer an unforgettable experience on their flights. Vistara will be offering a frequent-flyer programme too, but that would be directly related to the money spent and not the miles covered.
 
It may be recalled that Ashok Gajapathi Raju, the Civil Aviation Minister had very clearly spoken against the 5/20 rule, which stipulates that a domestic carrier must have completed 5 years of service and have a fleet of 20 aircraft before being allowed to fly overseas.  He had said that such a "rule does not exist anywhere in the world.”  Kingfisher has been grounded and SpiceJet is having a series of problems. There have been heavy cancellations of flights in the case of SpiceJet, which is causing inconvenience to the travelling public. Hence, the government is considering doing away with the 5/20 rule. Meantime, travellers are being forced to pay higher fares and other carriers are now overloaded with passengers.
 
In the likely event that the 5/20 rule is scrapped, chances are that Vistara may be able to bring in wide body planes which will have a greater number of seats to offer. The flights will cover longer distances with the flight range covering 14-15 hours, non-stop.   
 
At the moment, Vistara's chief executive officer, Phee Teik Yeoh, is hoping to increase its fleet to 20 aircraft in 4 years' time.  But, if the government were to withdraw the 5/20 rule, they may have to revise their plans and work out a strategy to meet the changed circumstances. 
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

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COMMENTS

Suketu Shah

2 years ago

The way Tata companies are run nowadays with the exception of TCS is a joke.Check their performances in the last 1 -2 yrs esp after Cyrus Mistry has taken charge and it speaks for itself.

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