They say the aviation business is not for the faint-hearted, where the implosion of one entity acts as a catalyst for the other. Jet Airways, once was the largest commercial airline in India, suspended operations in April 2019, and other airlines were quick to fill in this void. A prime codeshare arrangement that Jet adhered was with the German flagship carrier, Lufthansa Airways. After the demise of Jet, it was natural, that Lufthansa would seek alternatives to bolster their position in India, the third largest global aviation market.
When Jet folded, Lufthansa stated its interest in invigorating its partnership with other Indian airlines like Vistara Airways (the joint venture of Tata Sons and Singapore Airlines) and Air India. It is worth noting that Lufthansa is a founding member of the prestigious ‘Star Alliance’, of which Air India is a member; and the two already have a partnership in place on certain international routes. However, for domestic routes in India, Lufthansa chose Vistara over Air India, which shall lead to allocation of ‘LH’ code on 18 Vistara flights, commencing December 16, 2019.
‘With Vistara, we are strengthening our relationship in the weeks to come, after Jet having left the scene’ quoted George Ettiyil, the Senior Director of Sales – South Asia, Lufthansa Group.
With Air India already having placed its code on certain flights connecting Frankfurt to North America and EU, the question ‘Why did Lufthansa choose Vistara for its flights in India?’ is valid!
The reasons governing this decision might be:
- The uncertain future and foreseeable privatisation of Air India,
- The superior business and economy class product of Vistara, and,
- With recent investments of almost $500m by from Tata Sons and Singapore Airlines, having plans to add up to 60 aircraft: a combined order of A320neos, A321neos and 10 Dreamliners, a bright future lies ahead.
Lufthansa group also comprises of Austrian and Swiss Airlines, which do operate to India. Thus, after being a ‘Star Alliance’ member, could this deal lead Vistara to further tie -up with these airlines, thereby expanding yet further, after procuring their wide body aircraft? It is then easy to see the symbiotic benefit for Vistara and Lufthansa in this deal.
Do you think this deal will be advantageous for both carriers, especially considering the complex aviation economics in India? Let us know in the comments!