Vistara turned one on Jan 9.
For co-parent Singapore Airlines (SIA), which owns 49 per cent of the New Delhi-based Indian premium carrier, it would have been a proud day. The rest of the airline is owned by Indian conglomerate, Tata.
Before Vistara was finally born, SIA had tried for two decades and failed twice to secure a foothold in one of the world's fastest-growing air travel markets.
But was it worth the long gestation and has Vistara lived up to its parents' expectations?
On the surface, it looks good for the new kid on the block.
Within a year, Vistara - which operates narrow-aisle planes - has grown to nine Airbus 320s and serves 12 domestic destinations with more than 300 weekly flights.
To date, it has carried more than a million passengers.
Four more aircraft are expected this year with plans to grow the total fleet to 20 jets by the end of 2018.
Not too bad for a start-up in a very competitive market dominated by Air India, IndiGo and Jet Airways.
Closer scrutiny, though, surfaces some concerns.
Filling seats has been a challenge for Vistara, which has so far managed a 67 per cent load factor. This means that, on average, three out of 10 seats are empty each time a flight departs.
In business class, the proportion of empty seats is even higher.
Typically, airlines aim for an overall occupancy of more than 80 per cent.
In hindsight, a three-class configuration - 16 business seats, 36 premium economy and 96 economy - may not have been the best choice in a market where more than seven out of 10 domestic travellers fly low-cost.
India-based aviation analyst Neelam Mathews, said: "Given the competitive fares in the Indian market, Vistara may have misfired on its concept of business class... India is a market now used to the low-cost carrier concept."
Vistara's lower-than-expected passenger loads and yields have impacted its bottom line, said New Delhi-based analyst Kapil Kaul from the Centre for Aviation.
In its mid-year profitability review report released last October, the think-tank estimated that the combined losses for the two start-up carriers - Vistara and budget carrier AirAsia India - would hit up to US$90 million (S$129 million).
Vistara needs to rethink its aircraft configuration to better suit the demands of the Indian domestic traveller. One idea is to get rid of business-class seats and offer a two-class aircraft instead, with premium economy and economy seats.
To his credit, Vistara chief executive Yeoh Phee Teik - an SIA divisional vice-president who was parachuted in to help launch the Indian carrier - is already thinking about this.
He told Indian local media recently: "Whether the business section is brought down to 12, eight, four or zero is something we have not yet firmed up. We have for now decided to keep premium economy... The occupancy of our economy is the second highest among Indian carriers (first being SpiceJet). We will reduce business and increase our economy seating."
A decision has not been made, though, on whether Vistara will reconfigure the seats in its current aircraft or do it for future deliveries.
The airline needs to move fast if it wants to cash in on a market which is growing by about 20 per cent annually, with no slowdown in sight.
With fuel prices at their lowest in more than 10 years, this is the best time for Vistara to push ahead.
After several difficult years, rivals Jet Airways, IndiGo and SpiceJet are all expected to end the current financial year in the black, while flag carrier Air India is expected to cut its losses significantly.
One thing in Vistara's favour, possibly inherited from parent SIA, is its focus on service reliability.
In a country where delays are almost the norm, Vistara has delivered operational reliability and on-time performance.
Customer feedback so far has also been largely positive.
"The building blocks of creating a strong and very competitive organisation are visible, but it is a work in progress," Mr Kaul said.
As it sorts out its domestic operations, the next big thing on the horizon for Vistara is the Indian government's ongoing review of what is called the 5/20 rule.
Simply put, this requires a local carrier to operate domestic flights for at least five years and grow to at least 20 planes before it can go international.
Despite resistance from the established carriers, there is industry consensus that the regressive rule will be lifted soon.
It's what Vistara has been waiting for and once the green light comes, its international operations could take off within a year.
A presence in India - a key source market for Emirates, Qatar Airways and Etihad Airways - could prove an effective long-term strategy for SIA in terms of extending its network into Europe and the United States, where the Middle Eastern carriers are expanding aggressively.
Once Vistara gets its external wings, there will also be opportunities to work closely with SIA, for example, on code-share flights.
As the airline embarks on its second year, helmed by a CEO who has made clear more than once that he intends to stay, Vistara seems to be on the right flight track.
To quote SIA chief executive Goh Choon Phong, operating in India is not "a walk in the park".
But with a few operational tweaks here and there and a focus on costs and productivity, as well as what customers want, Vistara should be able to entrench itself as a key player in one of the world's booming air travel markets.
This article was first published on January 19, 2016.
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