Vistara, in which SIA owns 49% and Tata Sons Ltd owns 51%, is considering buying or leasing widebody aircraft for long-haul routes and is to seek a capital injection from its owners to finance any deal. If Vistara does indeed take-on Jet Airways then we could see a price war on direct flights from India to the EU and US and that in turn will affect Emirates and Etihad.
Prime Minister Narendra Modi’s cabinet ratified its policy changes in aviation on June 15, permitting domestic airlines to fly overseas, provided they deploy 20 aircraft or 20% of capacity, whichever is higher, on local routes.
The wide-bodied aircraft being considered would be in addition to the 20 it would have by June 2018 after leasing company BOC Aviation Ltd. delivers nine more A320s from Airbus. The key for Vistara is to try and advance that delivery timeline.
Etihad/Jet Airways together carried 2.4 million passengers to and from India during the first quarter of 2016, while Air India carried 2.1 million. Vistara is drawing up a 10-year plan for its growth in India.