Vistara crisis: Are Indian flyers set for bumpy ride this summer?

The Indian aviation sector might face a bumpy ride leading into summer as Vistara, the country’s third-largest airline, faced ‘crew unavailability’ in early April, leading to the cancellation of numerous domestic flights.

This problem, brewing for a while, spells trouble not just for Tata-owned Vistara but also for the wider aviation industry, causing major inconvenience for passengers in the coming weeks.

The core issue behind Vistara’s crisis comes from the airline’s inability to find common ground with its staff regarding a new pay structure before its merger with sister airline Air India.

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Reports suggest that the proposed pay package, ensuring pilots a minimum flying time of 40 hours per week instead of the previous 70 hours, would reduce their pay by a fair margin. This sparked discontent, particularly among pilots, who were required to accept the new terms by March 15.

However, the pilots called in sick leave in groups, leaving Vistara with no option but to cancel flights, sometimes dozens a day, causing its on-time performance (OTP) to fall to 51%.

Similar disruptions occurred during the Air India-Indian Airlines merger in 2007. Industry experts point out that airlines operating on thin margins with minimal crew are vulnerable to flight delays and cancellations when even a few crew members don’t report for duty.

“Airlines are operating at wafer-thin margins. In most cases, they have minimal crew. So, even when a handful of the crew members don’t show up for duty, their schedule gets disrupted,” Rajat Sharma, CEO of Sana Securities told Business Today.

Vistara’s management states that they are taking care of the situation head-on.

Vistara CEO Vinod Kannan said on April 6 that 98% of pilots have signed the new pay contract.

“We are dealing with this urgently. Therefore, we are recruiting more pilots and adjusting our operations slightly to add flexibility to our schedules. We’ve also deployed larger aircraft on some domestic routes to accommodate more passengers whenever possible,” said Kannan.

Despite an improvement in OTP to 80% the next day, challenges still persist as some pilots still have concerns about the contract.

Vistara has decided to trim 10% of its flights starting April 7 to prevent a drop in OTP and last-minute cancellations.

Experts predict that Vistara’s reduced operations could drive airfares up by 10-20% during the peak summer season.

With IndiGo grounding nearly 75 aircraft due to engine issues and Go First facing bankruptcy, the aviation market has already been facing a supply crunch. Now, with the pilot shortage at Vistara, summer travel could become more challenging for passengers.