A
few days ago I tweeted about what will matter most for the TATA-SIA venture,
now named Vistara, the configuration of the aircraft. There are more
opinions online than the seats in that aircraft and I have my own about how
premium can an airline get in India?
Just
before its demise, Kingfisher did an
internal assessment and analysis of what should be the offering and concluded with
a 164 seater A320 with 8J and 156Y. Sad that only few birds were converted to
this configuration before the airline went bust. The market surely has grown
leaps and bounds since then, but one must never forget that the Indian market
is cost sensitive. The same people, who are going to Goa and Kochi on cheap Air Asia fares, will quickly switch to
trains and busses when the fares cross a certain threshold.
Kingfisher, which operated a 32J + 119Y configured
A321 in Indian skies, had to keep them on ground during the off peak times,
since they couldn’t even fill up half of those seats even between Mumbai &
Delhi, the busiest air corridor in India with maximum business class seats.
Jet Airways has played around time and again
with the configurations and service patterns and beginning October will shift
back to FSC again & have anywhere between 8 and 28 J seats depending on the
aircraft. Air India operates their
A319, A320 and A321s with a mix of business class configurations across routes.
There
was a time when FSC started behaving like LCC, and soon the LCCs started
behaving like FSC. With Kingfisher, Jet
Airways, Air India, cutting down on food, cutlery, PTV, and also starting
to charge for it on one end, so FSC giving premium seats, providing food along
and some even having a European style business class with empty middle seat.
Vistara, as per news reports, will have a
premium configuration of 16J (4 rows), 36Y+ (6 rows) and 96Y (16 rows). Yes
these are talks and mostly speculations of how they will target mid managers
who will not take Business but Premium Economy and so on. Of all the big and
small companies that I know off, majority of the bookings happen with cheapest
options along with airline+timing combination.
Doing
some research on fares for this blog post was challenging for me since Indian
aviation companies these days have an eternal sale going on. However, I did a
search for D+21 days with a Monday/Friday combination for peak traffic tariff.
The fare varied between 4000(SG) – 9110(9W) with an average of 5500 for most of
the flights. For the same dates, business class fare on Air India or Jet Airways
ranged from 26000 to 42000!! Go - Business
with its European style middle seat empty business class was available at
10000, less than a 1000Rs more than the highest in economy.
SpiceFlex which comes with meal, baggage
allowance, no change fee and priority check-in was availableat roughly 9000rs
and an IndiGo ticket with meal and
first row seat was costing similar. IndiGo
seems to have got their offering like a true LCC – Fast Forward services separate,
Meal & Seat separate and so on, unlike SpiceFlex
which combines all into one. I haven’t had the time to check sector wise or
flight wise, which of this is cheaper but a bundled option and an unbundled one
to be compared from an LCC perspective, the unbundled is the way forward in
true LCC philosophy.
With
all these details, where are we heading to? What will be Vistara’s premium economy
pricing and will people occupy those 36 seats or opt for one of the 30 seats on
SpiceFlex or one of the 24 premium
seats on IndiGo?
I
was hoping that Vistara sticks to a 12J configuration, which is easy to fill up
even during mid-day and gives a lot of economy seats which can be filled up at leisure
destinations to be operated during the non-peak times. The configuration of 12J
& 144Y would have given them enough capacity on the metro routes, and had a
fair chance on the non-metro routes. There is no making money in the morning
and losing that in the afternoons. With aggressive Jet airways, the market for
the front cabin will only get more competitive from here on. Premium Economy is
a new concept and will take time to sync in. To make money, Vistara
will have to price it minimum 1.5 times the economy fare and finding clientele
for that definitely is a challenge.
In
India, there is no cost attached for the novelty factor and one such example was
how the Meh Air planes from Mumbai to
Lonavala were full at 3000Rs each way, while the Mumbai – Pune service goes
empty at fares below that. And hence Vistara should expect a lot of traffic in
the initial days who will say, “full
service wapis aa gaya”, “ purine dino
ki yaad aa gae”, “ achi service thi”
But will this lot be loyal or it will still be swayed by aggressive pricing of
LCCs is what only time can answer. As for me, I think I will opt for the
cheaper option and so would my office to send people between two cities.
As
always, wishing all airlines in India – Good
Luck !
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