ECONOMICS
PROJECT 
TOPIC- Report on the competition in the
aviation sector in India with reference to Vistara
 
 
 
 
 
 
 
Project by – Mehar Shota
Class – 12 A 1840
 ACKNOWLEDGMENT
 
I would like to express my special thanks of gratitude to
my teacher Mrs. Ashu Thapa as well as our principal
madam Maya Norula who gave me this amazing
opportunity to do this wonderful project which helped me
in doing a lot of research and learning about so many new
things.
I would also like to thank my parents and most importantly
my friends without whom this project wouldn’t have been
possible.
 
 
 
 
 
 
 
 
 
 
 
 
 

INDEX
 
1 – introduction
2- performance of public sector
3-performance of private sector
4-comparison of airlines in tabular form
5- operation strategies adopted by low cost carriers
6- effect of covid-19 on the competition of aviation sector
7- conclusion 
8- referencing 
 
 
 
 
 
 
 
 INTRODUCTION
 
Tata SIA airlines limited , operating as Vistara. Vistara is
an Indian full service airline which was established in
2014.it is based in Gurgaon with its hub at Indira Gandhi
international airport. It is a joint venture between tata sons
and Singapore airlines.
 The joint venture's mutual purpose is to reinvent air travel
in India by offering Indian passengers a smooth and
personalised flying experience that combines Tata's and
SIA's service excellence and famous hospitality. The
name "Vistara" comes from the Sanskrit word "Vistaar,"
which means "endless expanse." The name Vistara is
derived from the world in which Vistara lives.
VISTARA OFFERS THE FOLLOWING SERVICES-
BUSINESS CLASS-
Vistara's 158-seat Airbus A320-200 aircraft features eight
business class seats, two rows in a 2-2 layout. The seat
width is 20.12 inches (511 mm) and the seat pitch is 42
inches (1,100 mm).
PREMIUM ECONOMY
Vistara was the first local airline in India to introduce
Premium Economy class. In its single aisle Airbus A320-
200 aircraft, it now offers 24 premium economy seats, four
rows in a 3-3 arrangement, out of a total of 158 seats.
Each one is 18 inches (460 mm) wide and has a 33–36
inch (840–910 mm) pitch.
ECONOMY
Vistara has 248 seats on the Boeing 787-9 Dreamliner,
which were constructed by RECARO. They're arranged in
a 3-3-3 layout, with a 31-inch seat pitch and a 5-inch
recline. A 12-inch HD personal entertainment screen, a
six-way adjustable headrest, and USB power outlets are
also included in these seats.
IN FLIGHT ENTERTAINMENT
Vistara World is the airline's wireless Wi-Fi inflight
entertainment system, which passengers can use on their
own mobile devices. Vistara chose Bluebox Aviation
Systems' wireless IFE system to enable this service.  It
has a multimedia collection with more than 70 hours of
Bollywood and Hollywood content in a variety of genres,
etc.
 
 
 PERFORMANCE OF PUBLIC SECTOR
 
Air India is India's national airline, with its headquarters in
New Delhi. Air India Limited, a government-owned
company, owns the airline and runs a fleet of Airbus and
Boeing planes that fly to 102 domestic and international
destinations.
In 2007 the government of india announced that Indian
airlines would merge with air india. In 2015- 2016 , air
india earned a revenue of rs 20526 crore and registered
losses of rs almost 4000 crore, which only showed growth
in the coming years as they reported losses of rs 8000
crore for 2019-2020 . The airline has now been raising
money to fund losses and its operational costs. The
reason for the loss partially was due to the closure of
airspace by Pakistan which resulted in higher costs and
also caused a daily loss of 3 to 4 crore. The airline is also
awaiting investment which has been on block for several
years and reportedly owes several banks and the Indian
government over 8 billion dollars according to figures from
2019, a number which is now surely worsened by the
COVID 19 pandemic.
 PERFORMANCE OF PRIVATE SECTOR
Due to greater operational expenditures, Vistara's pre-tax
loss increased to Rs 1,814 crore in FY20, up from Rs 831
crore in FY19. Revenue increased by 58 percent to Rs
4,738 crore as the airline added planes and extended its
network, but performance was hampered by high costs
and low passenger demand in the fourth quarter.
The company's cash and cash equivalents were 700.96
crore as of March 31, 2020, compared to 149.17 crore as
of March 31, 2016. Vistara's net value and EBITDA for
FY20 have both declined to 842.05 crore and -920.39
crore, respectively, while its liabilities and losses have
grown.
While the airline had been losing money previous to the
epidemic due to its infancy and limited pricing power in a
cost-conscious and fiercely competitive Indian aviation
market, the scale of the losses has grown in recent
quarters due to the pandemic and the resulting disruption
of operations. Following the virus's fast spread across the
country, beginning in March 2020, airline operations will
be halted for a two-month period. Despite current cash
losses, Tata SIA has a healthy liquidity profile, with
sufficient free cash balances (Rs. 701 crore as of March
31, 2020) to keep operations running in the short term.
The liquidity profile is bolstered by the prospect of timely
funding support from the promoters, which has already
been proved.
The company has been rated A-.
 

COMPARISON OF AIRLINES IN
TABULAR FORM
 

Basis of Spice jet Air indigo vistara

No. of employees 11,675 9,993 23,531 2,224

Fleet size 118 127 280 47

Destination 53 102 87 37

 
*Spice jet, indigo , and Vistara being in the private sector
and air india being in the public sector.
 
 
 

OPERATIONAL STRATEGIES
ADOPTED BY BUDGET/LOW COST
CARRIERS
 A low-cost carrier, often known as a low-cost airline, is an
airline that focuses on lowering operating costs while
removing some of the typical services and amenities
included in the fare, resulting in lower fares and fewer
comforts.
Low cost carriers follow many simple operational
strategies such as-
1- Short hauls and routes, often which are between regional
 

or secondary airports
2- Powerful focus on price- sensitive traffic
 

3- Low average fares

4- Simple management and overhead structure, etc.

 
Low cost carriers (LLCs) emphasize on cost reduction and
control to compete with legacy carriers. Customers can
expect competitive prices from them. These carriers'
common cost-cutting measures can be generally
categorised into the following categories:
 
Fleet - LCCs have a fleet of single-type aircraft that are
comparatively modern. LCCs can save money on training
and maintenance by using aircraft from a single brand or
manufacturer. The cost savings are boosted by the
deployment of newer, more fuel-efficient fleets.
 
In flight services -LCCs do not provide all of the things that
legacy carriers do, such as free meals and drinks. Some
of these services, however, are available for a fee.
Because they cater to shorter distance routes, they have
high-density seating configurations with fewer galleries
and toilets. They also don't offer seat reservations.
 
Network-LCCs avoid the congested and expensive hubs
that conventional carriers utilise by employing the point-to-
point concept. LCCs are able to operate from smaller
airports, reducing ground waits and delays. Smaller
airports are typically less congested, allowing for a greater
number of trips and aircraft usage, lowering costs.
 
Marketing and human relations - Because LCCs have
lower fares, they require less promotion to sell tickets. The
majority of tickets are sold directly through websites, which
saves money on commissions paid to travel brokers. In
comparison to legacy carriers, LCCs also have reduced
labour costs.
 
 
 EFFECT OF COVID-19 ON THE
COMPETITION OF AVIATION
SECTOR 
In 2020, the COVID-19 pandemic had a tremendous
influence on the Indian aviation sector, with major airlines
laying off personnel, sending them on leave without pay,
or cutting their salaries due to losses and difficult
circumstances. During the year, the government had to
extend the deadline for making bids for Air India five
times.The loss data of India's two main airlines can be
used to estimate the impact of this disruption. IndiGo lost
Rs 2,884 crore and Rs 1,194 crore in the first and second
quarters of this fiscal year, respectively. SpiceJet lost Rs
600 crore and Rs 112 crore in the first and second
quarters, respectively.
The situation  is such that vistara , a full service carrier
airline has matched its fare price to indigo and spice jet
which are both low cost carriers. 
"The restoration of abroad travel is projected to be slower
and more difficult than domestic travel," stated aviation
research firm CAPA in October, "which would harm Air
India in particular, given about 60% of its revenue was
previously produced from international operations."
 CONCLUSION 
The airline sector is cyclical and vulnerable to a number of
external economic factors, such as consumer confidence
and company profit, that influence the number of local and
international travellers.
The aviation sector in india had come to a standstill
because of covid 19 and airlines all over the country are
trying to recover from their losses that were faced by the
companies in the past year and a half.
The airline sector is putting a premium on safety,
efficiency, and environmental performance, as well as
matching investment to returns, in order to sustain greater
deregulation and expansion. Give instruments to access
markets and consolidate where it makes commercial
sense, making aviation business sense, and attempting to
create a safe, secure, and prosperous environment, as
well as becoming a stronger contributor to the social and
economic well-being.
 REFERENCING
1- Limited, Mittal Analytics Private. “SpiceJet Ltd.”
Screener,
www.screener.in/company/SPICEJET/#profit-loss. 
2-Rating Rationale,
www.crisil.com/mnt/winshare/Ratings/RatingList/Rating
Docs/AirIndiaLimited_March
%2010,%202021_RR_247341.html. 
3-mishra , prachee. “The Financial Health of Air India.”
PRSIndia, 7 July 2017,
www.prsindia.org/theprsblog/financial-health-air-india. 
4-Abidi, Shahkar. “Vistara Has Been Following
Strategy of Measured Growth, Says CEO Leslie Thng.”
DNA India, 24 Aug. 2018,
www.dnaindia.com/business/interview-vistara-has-
been-following-strategy-of-measured-growth-says-ceo-
leslie-thng-2653884. 
5-Published by Statista Research Department, and
May 3. “India - Airline Market Share.” Statista, 3 May
2021, www.statista.com/statistics/575207/air-carrier-
india-domestic-market-share/. 

 
 
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