Vistara says premium economy class is here to stay as more passengers are choosing it

Vistara was the first to introduce premium economy class in India. It operates around 320 flights daily on domestic and international routes with a fleet of 67 planes, and three more aircraft will be inducted by April this year.

New Delhi: As it looks to consolidate its position in the full service carrier space, merger-bound Vistara has said the premium economy class is here to stay and there has been a surge in the number of passengers opting for these seats.

Vistara, a joint venture between Tatas and Singapore Airlines, was the first to introduce premium economy class in India. It operates around 320 flights daily on domestic and international routes with a fleet of 67 planes, and three more aircraft will be inducted by April this year.

Currently, the airline offers premium economy class in the three aircraft models operated by it -- Airbus 320 neo, Airbus 321 and Boeing 787-9 Dreamliner.

Vistara's Chief Commercial Officer Deepak Rajawat told PTI that the premium economy class is here to stay.

"We have seen a surge in passengers picking up tickets on the premium economy (class). There is an uptick year-over-year,' he said and added that premium economy is a differentiation that the airline has created in India.

India is one of the fastest growing civil aviation markets in the world and there has been a strong rebound in domestic air passenger traffic post the coronavirus pandemic.

"Premium economy is a differentiation we have created in India. The first airline to bring it in. It does give a lot of benefits compared to what the economy class (gives)... it gives a value to the customer and that is why we have seen a turn around in premium economy in the last two to three years," Rajawat said during an interaction this week.

In the first nine months of this fiscal, domestic air passenger traffic jumped 16 per cent to more than 11.45 crore compared to the year-ago period, credit rating agency Icra said in a report on Wednesday.

The latest number is also higher than the pre-Covid level (April-December 2019 period) of more than 10.86 crore, the report had said.

In November, Vistara's domestic market share stood at 9.4 per cent, as per official data.

To a query about concerns in certain quarters about rising airfares, Rajawat said the airline tries to strike a balance between supply and demand.

"There is nothing fair or something right or wrong in terms of fare. It is a balance one needs to decide on how to price it and what are the sweet spots to price for respective cabins,' he said.

Vistara is in the process of getting merged with Air India as part of the Tata group consolidating its airline business.

The proposed merger is expected to be completed by mid-2025 and all legal approvals for the transaction are anticipated by the middle of this year.

In November 2022, the Tata Group announced the merger of Vistara with Air India under a deal wherein Singapore Airlines will also acquire a 25.1 per cent stake in Air India.

On January 8, Vistara CEO Vinod Kannan said it is going to be a 'merger for growth' and the airline would look to take the airline's consumer-focussed services, operational excellence and staff into the merged entity.