Vistara needs time to grow up! And a good loyalty program

Vistara, the newest full-service airline in a decade, is not being treated well by the journos. There was a report in the news today, commenting on the 100 days of Vistara and how they are struggling with marketshare and occupancy.

In operation for over 100 days — operating 35 daily frequencies to 10 cities with six aircraft — the airline reported load factors of 53.6% during the month of March, the lowest in the industry. The average industry load factor, not counting Vistara, came to 79%. Vistara had, on an average, filled 58.6% of its planes in February and 45.4% in January.

Now, I don’t even know why this report was required. The airline, which is one of the smaller players in the industry, is being compared with the big boys who have over 60-70 planes and run a full-scale operation around the country. Vistara is just starting out, and needs to be given some time to get its act together.

From a network perspective, Vistara is expanding at a breakneck speed, but so far most of the growth is focussed out of Delhi, which is obvious due to Delhi being their operations hub. As of next month, Vistara will have this network of operation across 10 cities. However, apart from Mumbai, it has no meaningful presence in any other cities to be able to suit the need of the business traveller at present, and hence, should or would not be a part of the plans of many a business travellers accordingly. For instance, they have 1-2 frequencies on DEL-LKO which competes with 7 from Indigo and 5 from Jet. Over a period of time, as they have more planes, I’d expect them to increase frequencies rather than open stations. They really need to get into the Mumbai and Bangalore markets with more reinforcements to be able to get a significant impact from these cities as well.

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While Vistara is focussing on the product and experience, adding IFE, they do need other things going for them before they can bring people back into their fold. Here are some of those:

  • Loyalty program: Vistara needs a full-fledged loyalty program, and fast. There are many aspects known for Club Vistara, but quite frankly, till date, I do not know what am I really getting. I’ll earn points for certain flights, but are those points worthy of getting me a toothpaste or a free flight is something I don’t know. This is not how loyalty programs should work, and hence Vistara gets penalised from a lot of frequent travellers because they just don’t know what they are getting into.
  • An SME program: One of the things that gets in a lot of smaller companies inside the door is an SME program. Only Jet Airways has it in India right now. Many airlines need them. I’m hoping Vistara recognises the need to get such a program up and running and do passbacks to all the startups and the small companies which do not have travel budgets as big as the big boys.
  • A bigger network with more frequencies: This is one thing they seem to have all planned out, but will come with its own sweet time. Planes don’t get ordered and manufactured in a day. However, they do need some more activity out of Mumbai  to start with, rather than just 1x Bangalore and 2x Ahmedabad (apart from Delhi).

Overall, Vistara is a good airline, and they’ve done some things with fresh thinking. But just to have them grow overnight into a big boy, does not seem to be the name of the game. Indigo had a disciplined strategy of 1 plane a month being inducted. Jet Airways had no competition when they started. So, give Vistara a while to get their bearings right, before they get compared with failures such as Kingfisher Airlines!

What do you think about Vistara and how they should go forth?

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About Ajay Awtaney

Ajay is a financial services pro, working to bring order to the chaos of the financial industry on an everyday basis! Beyond that, he dons the hat of India's favourite frequent traveller, trying to help people elevate their travel experience via tips and tricks they never knew before, or introduce them to the world of miles and points. Armed with an MBA from MDI Gurgaon and graduate degree in computer science from the University of Delhi, Ajay brings a systematic and objective approach on the table for his audience in dissecting travel and loyalty programs in India and around the world, and how to benefit from them. Ajay has been quoted in various reputed traditional and online media including The Hindustan Times, Inside Flyer, Bloomberg, DNA India, Conde Nast Traveller, The Telegraph, Mumbai Mirror, Mint, MoneyLife and The USA Today.

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