Killing Vistara may hurt Tatas in long run

Two parallel airlines

Besides these innovations, the high standards of service, and Vistara’s distinct but unconventional ‘aubergine’ colours gave a new connect to the well-heeled. These were a class of flyers who had felt lost after Jet Airways shut down in 2019, and Kingfisher before that.

Maintaining two airlines, two brands from one stable is not a new game. Vistara and Air India can fly together – one for premium flyers, the other reaching a mass of customers with its higher connectivity. The dual strategy could well have flown the Tatas to number one ranking, past Indigo.

What possibly has worried the Tatas is they want Air India to be a premium airline, and Vistara would have cannibalized that customer base. This approach should take a leaf out of Coke’s acquisition of the cola brand, Thums-Up. When Coke launched for the second time in 1993 in India, Thums-Up ruled the market. The acquisition strategy was to buy and kill the competition. But despite trying it’s damnedest, Thums-Up continued to thrive and some customers turned to Pepsi Cola. The strategy was thus reversed and Thums-Up survived and grew as a parallel brand with Coke.

Thus, killing Vistara won’t necessarily push customers to the Air India aisles. Indigo is creating its own business class in anticipation of the bloodbath after Vistara shuts down. Maybe Akasa Air will graduate to what Vistara is today. What’s the guarantee, the Tatas’ strategy of killing Vistara won’t benefit Indigo or Akasa more than Air India?

For consumers, shutting Vistara is one more blow to the poor options Indian flyers have on domestic routes. Go Air and Jet Airways are shut. SpiceJet is sinking fast. Indigo, the largest of the domestic airlines, has grown so fast, it has lost track of the all-important entity – the customer. In the final audit, we will have a duopoly of Air India and Indigo – two equally mediocre offerings.