Vistara: Turbulence for the Tatas?

Abstract

This case talks about Vistara, an airline brand registered under the name of Tata Singapore Airlines (SIA) Airlines Limited, which started as a joint venture between Tata Sons and SIA Limited in 2013. While the company was founded with the intent to expand, as suggested by its brand name, the airlines has failed to register positive returns ever since its inception despite a 190% compound annual growth rate (CAGR) in total revenue from financial year 2016 to financial year 2020. While company’s ratios have shown a dismal performance over the years, its competitors and the market leader have shown better performance or at least some form of leadership in one of the operating aspects. In an industry plagued with problems such as fluctuating crude oil prices, rising maintenance and leasing costs, and other operating costs, most of the airline companies have registered losses in recent years, the magnitude of which has further aggravated due to COVID-19. Vistara will need to revisit its short-term and long-term strategies to expand its position in the Indian as well as the international aviation market.