Tuesday, June 28, 2016

Singapore Air’s India unit to challenge gulf carriers’ dominance

Within weeks of India easing aviation rules, Singapore Airlines Ltd.’s local venture is charting a course to take on carriers from the Middle East. It’s counting on a surge in international traffic from the world’s fastest growing major air-travel market.

Vistara, in which the city-state’s flag carrier owns 49%, is considering buying or leasing wide bodied aircraft for long-haul routes and will seek funds from its owners to finance the purchase, the company’s Chief Executive Officer Phee Teik Yeoh said in an interview June 24. Vistara, which has 11 planes in its fleet and is co-owned by India’s Tata Sons Ltd., needs at least nine more to fly abroad under the relaxed policy.

The number of international travelers from India is poised to grow 10-fold to 500 million by 2050, according to a CAPA Centre of Aviation study that was commissioned by Vistara. The carrier’s plans may be the start of a fresh challenge for Emirates Airline and Etihad Airways PJSC that have long been the biggest foreign carriers in India and have, along with Air India Ltd. and Jet Airways India Ltd., dominated the market for offshore travel.

“We believe Vistara may pull out all stops to get to the 20 number and fly overseas,” said Amber Dubey, the New Delhi-based India head for aerospace at KPMG. "Being an Indian carrier they will have the advantage of providing non-stop flights from India to the European Union and US, something that Gulf carriers can’t do."

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