FinFloww
FinFloww
@FinFloww
Jan 19 3 months ago 27 tweets Read on X

On Monday, Vistara took its last flight & is now completely shut

But isn’t it a silly move by Tata to name the new combined airline “Air India”,

rather than “Vistara” which is the most beloved Airline in India right now?

THREAD: Why Tata is preferring Air India over Vistara🧵

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A lot of people believe that the entire joint entity should be named Vistara instead of Air India.

In fact, they should get rid of the Air India name altogether because all it's known for now is its poor service.

Now, imagine this — India has just gained independence, and no one expected this country, burdened by internal problems and poverty, to build a world-class airline.

No one except JRD Tata.

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He said, ”Who, I remember being asked, would want to entrust himself on long overseas journeys to a small Indian airline, its planes flown and maintained by Indians, in preference to such experienced giants as Pan Am, Trans World Airlines, Royal Dutch Airlines,

British Overseas Airways or Air-France?”

A lot of people think that Vistara was able to achieve everything it did because of its partnership with Singapore Airlines and their expertise.

But the thing is, when Singapore Airlines was started,

it was looking to learn from the best airline in the world, and they chose India.

To learn from Air India.

So, it’s not them we follow; it’s they who followed us.

Air India was that big of a name.

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There’s a lot of recency bias coming into the picture when people complain about shutting down Vistara, because they have no idea what Air India used to be, and what it will be now.

Air India wasn’t just an airline; it was like a flying advertisement of India and her hospitality to the world.

It was an important symbol of Indian pride and culture — a pioneer (or Maharaja) of hospitality in the aviation industry.

They called it “Your Palace in the Sky.”

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That’s what they did with the service, but in practice, an airline is as good as the routes it serves.

Once Tata had established the Air India name across the world as the most luxurious airline there could ever be,

they were the first airline in the world to offer a round-the-world service, connecting four continents.

But why shut down Vistara completely?

Why not keep it running alongside Air India?

Vistara was everything that Air India’s modern version was supposed to be,

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had they not been snatched away from Air India back in 1953.

It’s just that the Tatas lost the battle in a highly socialism-driven India when their beloved airline was forcefully nationalized.

Even after nationalization, JRD Tata remained the Chairman of the airline,

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purely for the love of what he had built and to make sure that the government didn’t mess it up.

But in the 2000s, a decade after his death, his worst fears came to life as Air India started being known for all the wrong reasons.

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Meanwhile, Ratan Tata was in pursuit of opening another airline to restart where his uncle had left off.

In 2013, Vistara came to life as a 51:49 JV between Tata Sons & Singapore Airlines.

It immediately won people’s hearts with its excellent quality service and experience.

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Vistara’s philosophy was deeply ingrained in customer satisfaction, while maintaining cost-efficiency.

This is literally the same way Air India was positioned.

And now, since the Tatas have control of Air India again, they don’t want to own two premium airlines competing against each other.

Because, hypothetically, if they had tried to maintain both brands,

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people would have perceived Vistara as superior to Air India, given its current quality of service.

But then, why not turn Vistara into a low-cost airline instead and keep Air India for the premium?

Vistara already has an established premium perception and a particular set of customers who value it because of that.

If they meddle with that perception or reduce its quality to meet the costs of a low-fare airline, they’ll end up downgrading Vistara’s brand value.

In either case, Tata would have lost business in one airline or the other.

So, it does not make sense for both brands to exist under one umbrella.

But still, the question remains:

— Why did they prefer the Air India brand name over Vistara?

You see, even though Vistara is quite well-known in India,

they are looking to create a high-performing global airline that would serve the growing demand of India’s international air market.

Since Air India is well-known across the world, it was a no-brainer for them to choose it over Vistara.

But the Tatas have given it more thought, & they are thinking big.

Firstly, they want to build an airline that people can trust — not just domestically, but internationally.

Emirates, Qatar, Air France, British Airways, & Singapore Airlines are trusted because of their country’s brand on them.

The Air India brand stands for India’s warm & top-notch hospitality, which can easily win trust, but it would take a long time to build that with Vistara.

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Now, even though they are letting go of the Vistara brand name,

they are going to maintain the foundation on which it was built as a startup inside a big conglomerate.

They are not letting go of the Vistara ethos; they are just integrating it.

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Also, having a 5,000-member team that built the greatest premium airline in the country in just 8 years does make the process easier.

All this will help Air India revamp itself and gain all the loyal customers of Vistara who want to experience that level of premium service.

And since Air India was the benchmark for the entire airline industry, it would actually be very silly to let go of such an airline for something that merely has a 10-year history.

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