Singapore Air's Indian unit resorts to free seats to lure fliers

[NEW DELHI] Singapore Airlines Ltd's premium Indian carrier Vistara has resorted to free tickets as intense competition and low fares add to the task of wooing passengers.

Vistara, jointly owned by Singapore Airlines and Tata Sons Ltd, filled about 59 per cent of seats on average in the first half of 2015, government data show. That's the least of eight major passenger carriers operating in Asia's third-largest economy. SpiceJet Ltd, which last year offered base fares as low as 1 rupee (2 Singapore cents), filled more than 87 per cent.

Vistara on Aug 12 offered a free premium economy class ticket - a tier it pioneered in the domestic Indian market - with every business class ticket purchased. Vistara didn't comment on whether the move is aimed at filling more seats.

Given Vistara's three-class configuration of business, premium economy and economy, "it's too simplistic to look at the load factors relative to airlines with a single class, high density configuration of 180 plus seats," chief commercial officer Giam Ming Toh said in e-mailed responses to questions.

Indian companies are already adding Vistara's premium economy as an option in their employee travel policies, he said. Its load factor rose to 71 per cent in May from 53 per cent in March, he said, adding the airline's fleet will expand to nine from six in the next three months.

Vistara will continue to see near-term pressure on premium- economy yields, said Kapil Kaul, South Asia chief executive officer for Sydney-based CAPA Centre for Aviation.

"Making premium economy work is critical," Mr Kaul said. "Otherwise, a configuration correction will become necessary." Singapore Airlines closed down 0.9 per cent in the city state on Monday. The stock has dropped about 14 per cent in 2015.

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