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26 January 2020
INVESTMENT

Singapore Air considers adding more Boeing jets in India

Singapore Airlines has reason to look to India as it faces intensifying competition from budget carriers in its home market of Southeast Asia

Vistara, Singapore Air’s Indian joint venture, is considering ordering more 787 Dreamliner jets/Bloomberg

by Bloomberg

Singapore Airlines is preparing to add planes in India to compete with Emirates in one of the world’s fastest-growing aviation markets.

Vistara, Singapore Air’s Indian joint venture, is considering ordering more 787 Dreamliner jets—whose sticker prices start at about $250 million each—from Boeing to add flights to destinations as far away as the US.

The carrier is also mulling buying more A320neo-family planes from Airbus, including the longest-range A321XLR model.

For Vistara, which counts top Indian conglomerate Tata Group as its majority shareholder, the move would be part of plans to loosen Emirates and Etihad Airways’ grip over the lucrative market of flying passengers between India and Europe or the US.

As part of its expansion plans, Vistara is also considering buying some of London Heathrow airport’s prized slots—which can cost as much as $70 million each for about two decades—and that may determine the scale of the carrier’s plane orders.

While India’s aviation market is growing fast, it’s notoriously difficult to make money there as fares often sell below cost. Jet Airways India, once the country’s largest airline by market value, has been grounded after it ran out of money and the government has been struggling to find a buyer for unprofitable Air India.

Still, international routes have been among the few profitable flights out of India, with Emirates and Etihad leading the way for foreign carriers by accounting for about a fifth of total passenger traffic.

Vistara only flies narrow-bodied planes but it’s ordered its first widebodies—six Dreamliners that are due for delivery by next year. But those jets are not suitable for flights to North America because they do not have space for the crew to rest during 16-hour flights.

That would mean that the carrier would need to make costly changes to existing orders or buy new planes with the right configuration in order to fly planes to the US.

Vistara, 49 per cent owned by Singapore Airlines and 51 per cent by Tata, started flying in January 2015. India doesn’t allow foreign airlines to fly between local airports unless they partner with a local company to start a domestic airline.

The carrier operates more than 1,400 weekly flights with 39 Airbus and Boeing jets and has a local market share of 5.8 per cent, the smallest among six major players.


RELATED STORIES: Singapore Airlines Vistara Emirates Etihad Airways

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