The Future of Air Vistara as a Brand?

Indian Aviation has been a Grave Yard for Numerous Brands, Big and Small, Will one More Make any difference?

Indian aviation industry is well known for being a grave yard for the best of brands. Most notably, take the example of Indian Airlines, a name as good as any other, but it was shut down one fine day, in the name of a merger, which too did not work well, done with the best of intentions, notwithstanding. The fact is, that a brand well known, as the first Indian airline domestically, was given a go by, overnight. For no fault of its own. At one time, it was the only airline in the domestic skies. It had a legacy. It did get a dubious edge once we had the might of private airlines to compete with; it did find its feet slowly. Not for want of its staff or systems, but for government apathy.

In those early days of privatisation, quite a few names had emerged. Short-lived but some had their day out in the sun – Damania was one. Others like Archana Airways and East-West are not in this list, they too came and went.

Then there are others like Air Deccan, a name that made its mark for its Rs. 500 a ticket, bought over by Vijay Mallya. Capt. Gopinath once told me that Mallya had promised him not to drop the name. But then promises are meant to be broken. He did drop the name, merged it with his own Kingfisher, which then had a name to reckon with. In fact, there was a time when Jet and Kingfisher competed fiercely. But soon enough, though, Kingfisher did not last, saddled with irresponsible debts, with Mallya deciding to fly away himself to ‘safer’ havens.

Air Sahara, not perhaps that much in the same league, but one that did well as part of the once formidable Sahara Group, was bought over by Naresh Goyal’s Jet Airways. There are many like me who believe that this single act may well have been the beginning of the end for Jet Airways; regardless, one more name and brand that was dismissed as being unworthy. Air Sahara was finally merged.

Jet Airways, a big name and an enviable one at that, gradually wilted from its proven promise. A globally acclaimed airline, it began to lose out on numerous counts, that deserve a chapter for a classroom study. In that airline, India lost a big name; the one person who created it was also responsible for bringing it down.

Indigo, fortunately for the nation, has been a responsible, steady, growth driven airline. It has earned laurels for itself for long years; with its record orders for new aircrafts, it is destined to rule the Indian skies for long.

At this time of writing, we also have SpiceJet and Akasa in the Indian skies. The former is still flying in comparative choppy winds, though it has been helped out with a recent support of some Rs. 2800 crores to tide over its affairs. Akasa is an aspiring airline, from all accounts, being flown with a responsible and confident team.

All this while there has been Air India, a merged entity with Indian Airlines. A merger that never went well. It continued to make losses, all at the expense of the Indian taxpayer. The government dithered, to sell or not to sell. Finally, it did. The struggling Air India (the national carrier, as a government owned financial entity), was put on the block. With considerable efforts and financial package that would in hindsight appear a win-win situation, was bought over by Tata’s.

Tata Group had been keen on an airline for long. Having being denied entry on a number of occasions, they created a JV with their long-time friend in SIA. Tata had also entered a JV with Tony Fernandes’ Air Asia, and Tony was now keen to make an exit. So, when they bought Air India, they had not one, not two, but three airlines in the sky. Then started the process of what to do with so many, some were competing with each other. Some kind of serious introspection and rationalization was inevitable.

The easy part was the merger at the budget segment, closing down Air Asia bit, as not too prominent and significant. The bigger task has been the merger of Air India and Vistara, and herein hangs a question?

Air India has been India’s biggest airline internationally, and the big brand! Is that true for today? What will it take to redeem its earlier reputations and compete again with Lufthansa, Singapore Airlines and British Airways. Yes, it has placed formidable orders for aircrafts, of all possible configurations. These have started being inducted – offering a new experience that is expected of an airline to compete globally. Yes, this has started happening. But it might take another few years for all its aircrafts to acquire that uniform standards across all flights, across all sectors. It has a large number of employees, not adequately trained to be among the best; they stagnated during the time when the airline was being run by government, not their fault. The more experienced among them have taken voluntary retirement as per the management’s plans and hopes. They wanted a young team as part of reducing overall staff cutting. New systems are being put in place, with TCS tasked with doing the best. Inflight is also presently mixed as some of the older inflight catering arrangements still valid and in place. Its work in progress. How long will it take to achieve the near perfect goals, say, of being another SIA in India?

It is a Herculean task, one that the Team Air India has taken up in all earnestness, but it is not easy.

Meanwhile, Air Vistara has been built assiduously, and most successfully, as a pride of India; an airline of preference that has caught the fancy of the travelling public. It has SIA services and systems behind it, it was and is meant to be another SIA kind of airline. Equally important, a thousand plus crores have been invested in it, eventually in building the brand. One wonders what its brand must be worth, today? Flying Vistara has acquired a bragging right at least domestically.

Reports now suggest the merger of Vistara into Air India will happen this year. Does this mean the end of another big brand cultivated in India? All this in the name of a merger, yet another. It would not have been thought of had the TATA’s not bought over Air India. Now that it has, it is seen as unnecessary to keep so many brands and airlines running under one umbrella.

Is there any difference between airlines, as an entity and brands? Can one commercial entity run different brands. After all, the TATA owned hotel company runs multiple brands and promises to grow some more. So, why cannot an airline company run different brands with different offerings. You may argue that running a budget brand and a luxury full-service brand cannot be operationally successfully under one corporate entity. That may well be true, but we can always find an answer.

On present ratings, I would rate Vistara a few notches higher than Air India. It would take Air India a few years to reach the Vistara level, the turnaround will not be overnight. It is a long hill to climb, there is no saying what levels will be reached by when. Vistara has been nurtured within the SIA ethos, as the midwife, while Air India was a legendary airline only 25 years ago. There is strength in keeping the brand alive, within a merged commercial entity, that has different offerings. Keeping it going, till at least the overall Air India has achieved the present Vistara experience.

So, my submission is: run it as you like it, within any commercial entity, but don’t kill or dilute the brand. It will be only one more in the history of Indian aviation! So, perhaps, you can also say: one more, how does it matter?