Image Credits : PTI
In a recent interview with PTI, the CEO of Vistara, a prominent airline joint venture between Tata Group and Singapore Airlines, expressed optimism regarding the fluctuating nature of airfares. The CEO acknowledged concerns about air ticket prices occasionally soaring to seemingly irrational levels. However, he pointed out that passengers tend to voice complaints when prices rise but rarely acknowledge reductions.
The airline CEO emphasized that, despite seasonal variations, some measures are in place to prevent airfares from becoming exorbitant, especially during natural calamities or unfortunate events. He reassured the public stating that they aim to ensure it is not a price-gouging opportunity.
Addressing the perception of escalating airfares over the years, the CEO provided historical context. He noted that the average price of a ticket between Delhi and Mumbai has remained relatively stable over the past two decades, despite increased operational costs. Factors such as the entry of new airlines and the growth of low-cost carriers have contributed to maintaining this balance.
He remarked that pricing is a function of supply and demand. He expressed hope that it would come to the right sweet spot where customers would travel, and airlines could make money. He highlighted the delicate balance needed in pricing strategies.
When questioned about the potential for Indian airfares to align with global levels, the CEO emphasized that this would depend on India’s economic growth trajectory. He acknowledged that India’s aviation market is not as mature as some Western markets due to being a growing economy. The CEO suggested that as secondary and tertiary cities mature, a favourable pricing equilibrium could be achieved.
In the context of Vistara’s ongoing merger with Air India, the CEO clarified that the merger was primarily for growth, not cost-cutting or efficiency measures. He assured that job losses were not part of the plan, and employees would find opportunities within the expanded entity.
He stated that the merger is intended for growth, emphasizing that it is not for cost-cutting or efficiencies. He clarified that they are not considering job losses and assured that there would be job opportunities available for employees in the bigger entity.
Highlighting the growth achieved over the airline’s nine years of operation, the CEO outlined plans for network expansion in the next three to six months. He explained that once legal approvals were obtained, discussions with Air India about the integration process would commence.
Regarding integration plans, the CEO mentioned ongoing activities that align with legal requirements. With approvals in progress, he expressed eagerness to delve into more intricate cooperation, emphasizing the sharing of operational knowledge and structural considerations for the integrated entity.