India’s top 2 airlines vie for each other’s customers: ‘it’s a long-term game’

Market leader IndiGo is dipping its toe into business-class travel, as Air India completes its merger with Singapore Airlines-owned Vistara

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An Air India plane passes the sun after take-off in Ahmedabad, India. Photo: Reuters

Published: 9:17am, 11 Nov 2024Updated: 9:20am, 11 Nov 2024

India’s airlines are set for a landmark week, with two milestones days apart, that will redefine the competitive landscape in one of the world’s fastest-growing aviation markets.

Vistara operates its final flight on Monday before its planned merger with Air India kicks in the following day, marking the end of a complex and messy two-year long process. On Thursday, market leader IndiGo, operated by InterGlobe Aviation Ltd., debuts its business-class cabins on select routes as it ventures beyond budget travel for the first time.

The two developments mark major changes for India’s two largest airlines as the carriers expand and foray beyond their traditional areas of expertise.

By incorporating the Singapore Airlines Ltd.-owned Vistara into the much larger but unprofitable Air India, the Tata Group has taken on one of the most complicated aviation mergers globally that included navigating pilot protests which led to dozens of cancelled flights this year.

The union will be a crucial test of the coffee-to-cars conglomerate’s ability to improve the quality of Air India’s services and turn around the loss-making carrier it bought from the Indian government in 2021 without losing the brigade of loyal Vistara fliers.

A Vistara plane lands in Mumbai last year. Devoted Vistara fliers are worried about a fall in cabin-service standards post merger. Photo: Reuters

The challenge for the no-frills IndiGo, meanwhile, will be to revamp its image – it’s like India’s Ryan Air – and dent Air India’s supremacy in the premium sector.