A third full-service airline, Vistara, will now navigate India's fiercely competitive market. Vistara, as its Sanskrit name suggests, is banking on a limitless expanse in bridging demand between business and economy travellers.
A joint venture between India's Tata conglomerate and Singapore Airlines, Vistara is headquartered in New Delhi and will initially operate flights to Mumbai and Ahmedabad.
The airline brings the popular premium economy class back to the domestic airline market. Industry watchers feel that frequent flying mid-level professionals will be the most enticed by the various options available. Vistara is also hoping that its strong branding will justify the higher fares compared to its full-service competitors, Jet Airways and state-owned Air India.
Mr Gaurang Shah, vice-president of Geojit BNP Paribas Financial Services, said: "People who want to travel in comfort would definitely opt for it. The number of seats that will be available also in this particular category, I feel it is going to be very limited. We were dying to see a full-service carrier coming into effect and the entry of Vistara provides much relief for travellers on holiday or for professional reasons."
The airline, which promises a luxurious premium economy class, will operate 87 weekly flights to and from Delhi. It plans to scale up to 300 flights in four years' time. Experts, however, voice caution for Vistara's expansive plans. With high state taxes in India making jet fuel the costliest in Asia, keeping costs low on the back-end and ensuring prices are competitive will be fundamental to the airline's bottomline.
Mr Kanu Gohain, former director-general of civil aviation in India, said: "If a consumer gets a new ticket at a cheaper price then they will certainly go for that cheaper price, because no flight will be more than two-and-a-half hours."
This long-awaited joint venture between Tata and Singapore Airlines also plans to tap the international market if the Indian government permits it.
Tailwinds are in favour for the new entrant given the economic turnaround and lower oil prices. However, experts warn that the airline will have to put in significant effort in sustaining takers for its premium services as it seeks to create a niche in India's airline industry, which is largely dominated by budget carriers.