Acquisition of Jet Airways by the Tatas -Advantages

Issue: 6 / 2018

The Vistara–Jet Airways combination is expected to deepen its full-service roots and focus on capturing the premium travellers market. With the domestic market dominance of IndiGo, the focus needs to include international long-haul connections. The nature of strategy dictates hub cities with strong origin and destination traffic demand and central to this strategy will be the metro cities. To build on the loyalty of their passengers, Vistara-Jet Airways combine will also focus on breadth (number of cities) instead of depth (number of frequencies).

Jet Airways is strong in Mumbai and New Delhi, while most flights of Vistara start or end in New Delhi. These cities are the two largest airports, in terms of passengers and are critical to the Indian premium segment. Vistara has been unable to exploit the Mumbai roots of the Tatas. Acquisition of Jet Airways brings desperately needed landing and parking slots at the highly congested Chhatrapati Shivaji airport at Mumbai. Jet Airways has focused in the recent past on India’s third largest air passenger city, Bengaluru and has launched flights to Singapore and Amsterdam from the tech city. The Singapore to Europe connection over Bengaluru is filling Jet’s flights, and we expect Bengaluru to be the third hub city for the combined entity. With the acquisition of Jet Airways, Vistara will accelerate its expansion plans by at least five years by bringing in a network, bi-lateral access, landing and parking slots at airports both in India and overseas.