The full-service Indian airline Vistara was founded in 2015 as a joint
venture between Singapore Airlines and Tata Sons. With a name that translates to “limitless
expanse,” Vistara has made a name for itself as a premium airline in India’s cutthroat aviation
industry, known for providing excellent travel experiences.
Vistara’s goal was to take over the premium market segment by providing services on domestic and a
few international routes that were on par with those of the leading international carriers. By putting
comfort, high-quality service, and an opulent travel experience first, it aims to revolutionize air travel
in India.

Market Situation and Difficulties

• Indian Aviation Landscape: With fierce competition, price-conscious consumers, and a predilection
  for low-cost carriers (LCCs), India’s aviation sector is among the fastest-growing in the world. Lowcost airlines like IndiGo, SpiceJet, and Air India—a full-service carrier that has become a major rival
  since merging with AirAsia India—are among the main rivals.
• Challenges Vistara Faces: Price Sensitivity: Vistara competes on service rather than just price because low-cost carriers are highly preferred in the Indian market.
• High Operational Costs: Premium airlines that want to stay profitable face difficulties due to fuel
  prices, airport fees, and other operating costs.
• COVID-19 Impact: Revenue suffered greatly as a result of the pandemic’s substantial decline in
  demand for air travel.

Strategies for Competition

• Differentiation through Premium Services: Vistara provides a three-class cabin configuration(Economy, Premium Economy, and Business), which sets it apart from the majority of Indian carriers.By offering better food and drink selections, cozy seating arrangements, and improved in-flightamenities, the airline hopes to set itself apart
• Collaboration with Singapore Airlines: Vistara has established a strong training framework,operational procedures, and customer service standards that are in line with international standardsby utilizing Singapore Airlines’ operational expertise.
• Loyalty Programs: Club Vistara, Vistara’s loyalty program, encourages repeat business and fosters adevoted clientele by providing special benefits to frequent travelers.
• International Expansion: In order to increase its revenue streams, the company made the strategic choice to enter foreign markets. Southeast Asia, Europe, and the Middle East are importantinternational routes.

Innovation and Digital Transformation:

Impact and Performance

• Customer satisfaction: Because of its superior service offerings, Vistara routinely receives high marks for customer satisfaction. The airline’s reputation as a brand has been strengthened by the numerous accolades it has received for providing exceptional customer service.
• Financial Performance:Due in part to pressure from competitive pricing and high operating costs,Vistara initially experienced operational losses. However, as it increased its market share, especially in international routes, its revenue has steadily increased.

In order to carve out a niche for itself in an otherwise cost-driven market, Vistara
strategically entered the Indian aviation market as a premium full-service airline. The airline has
effectively set itself apart through excellent service and a powerful brand, despite obstacles brought
on by price sensitivity and high operating costs.

Vistara’s ability to strike a balance between cost effectiveness and premium service will be
crucial to its future. Vistara may profit from synergies with Tata’s larger aviation strategy as a result of
Air India’s consolidation under Tata and rising demand abroad. As suggested, a merger with Air India
might improve its position in the market.

In order to create a sustainable premium offering in a cutthroat market, Vistara’s
journey emphasizes the significance of strategic positioning, brand differentiation, and service
quality. Its early success indicates that, even in cost-sensitive settings like India, there is a market for
high-quality services.

This case study demonstrates how Vistara used customer experience and service quality
differentiation to forge a name for itself in a cutthroat, price-driven market. Despite a number of
obstacles, its growth has been made possible by its strategic focus on digital innovation, international
expansion, and brand loyalty