Since January, Indian full-service carrier, Vistara, has been progressively sending its pilots to fly with Singapore Airlines (SIA) and its budget subsidiary, Scoot.
This arrangement, which was first announced internally to the pilots in August last year, is aimed at giving identified young pilots, mostly first officers, the opportunity to gain international as well as operational experience on the long-haul wide-bodied Boeing 787 Dreamliner which Vistara will start taking delivery of next year.
Vistara currently operates domestic routes to over 20 cities using a fleet of the short-medium range single-aisle Airbus A320.
Media in Singapore reported that around 20 pilots from Vistara will be attached to SIA for a period of a year to supplement its manpower especially at Scoot which is facing a pilot shortage. Moving resources across the same group is not new. AirAsia India, which Tata Sons owns the majority of, also does this. Neither is the shortage of pilots unusual. The aviation industry especially in Asia has had to deal with this because of Chinas air travel boom which has resulted in talent being drawn there due to more competitive salaries.
An SIA spokesperson was quoted by Singapores Channel NewsAsia as saying, "These pilots, who have already been flying with Vistara for a number of years, had to undergo our vigorous selection process and meet all Singapore regulatory licensing requirements. They will be with SIA for about 12 months before returning to Vistara to pioneer the 787 operations."
As SIA's fleet is expanding, there will be no expected loss of flying hours to the airline's own 787 first officers even with the induction of those from Vistara, SIA added.
Vistara, which started operations in 2015, is 51 per cent owned by conglomerate Tata Sons and 49 per cent owned by SIA. It is positioned as a premium full-service carrier charging fares which are higher than others in the market. Vistara was the first airline to introduce premium economy seats on domestic routes in India.
For SIA, the investment in Vistara represents a strategic business opportunity to participate in one of the fastest growing aviation markets in the world. Many see India with a burgeoning middle class as an under-developed travel market with only 50 million out of a population of 1.3 billion expected to travel abroad this year, according to the UN World Tourism Organisation.
Since March 2017, SIA customers have been able to buy tickets on code-sharing flights operated by Vistara. They can easily book a flight from Singapore to an Indian destination, where they connect to a Vistara flight.
Vistara is Tatas first re-entry into the full-service airline industry. Tata founded and owned Air India before the carrier was nationalised in 1953. It already holds a 51 per cent stake in budget carrier AirAsia India.
As a full-service carrier, Vistara attempts to obtain a premium ticket price to offset the higher costs of offering perks such as a meal service, checked baggage allowance and a frequent flyer programme.
Vistara sees a path to eventual profitability through plans to launch international flights which are more financially rewarding and aircraft ownership rather than leasing.
At the moment, it only flies within India using 22 Airbus A320s. Its plan to launch international routes last year was thwarted due to regulatory issues. However, it expects approval to be obtained soon with operations to start a few months after that.
In 2018, it placed orders for six Boeing 787 jets and 13 Airbus SE A320neos with a list price value of US$3.1 billion as part of its growth plan to add more domestic flights and to launch flights into the international market. These purchases together with lease agreements will take its fleet size to 77 within five years and it has further options to purchase another 11 aircraft.
Vistara has 4 per cent share of the domestic market, well behind market leader and budget airline IndiGo which has a 43 per cent share. It narrowed its losses to US$58.9 million in the 2018 financial year ended March 31 from US$70.9 million a year earlier. Based on figures for the first 8 months of the year, it is estimated more than 5 million passengers would have flown with Vistara in 2018, placing its growth rate at almost 40 per cent which is double the Indian domestic air travel market growth rate of about 20 per cent.
However, in a highly price-sensitive market, it faces tougher market conditions this year with higher fuel prices, the lower Rupee as well as increased capacity of competitors. A consultant estimate that it could lose US$150 to 200 million for the financial year ending 2019.
Vistara, whose name means limitless expanse in Sanskrit, employs about 3,000 people. It is not known how many of these are pilots. (ANI)