‘A total of 50 new narrow-body aircraft from Airbus (including 37 aircraft on lease) are scheduled for delivery to the airline between 2019 and 2023.’
Vistara, a joint venture between the Tata group and Singapore Airlines, that started its operations in 2015, is soon going to launch its international operations. On the sidelines of the airlines’ preparation for the launch, Leslie Thng, CEO, Vistara, spoke exclusively to The Sunday Guardian about the aims and vision of the airlines in India. Excerpts:
Q: Vistara got its 21st fleet recently, making it eligible for international operations. How soon can we expect an announcement for the airlines to take up international operations and what are the preferred destinations that you are looking to start?
A: We recently added the 22nd aircraft to our fleet, and are awaiting necessary approvals to start international operations by the end of this year. We will start with destinations within the range of our existing Airbus A320neo aircraft. We will share more details at an appropriate time.
Q: Vistara has placed orders for 13 Airbus A320neo and six Boeing 787-9 Dreamliner to add to its existing fleet. How do you think it would boost the airlines and its operations?
A: A total of 50 new narrow-body aircraft from Airbus (including 37 aircraft on lease) are scheduled for delivery to us between 2019 and 2023, and the six wide-body 787-9 Boeing Dreamliner will be delivered between 2020 and 2021. We will use the Airbus A320neo family aircraft, which includes the A321neo, to densify our domestic network and fly to other international destinations within the range of 3-6 hours. The six Boeing 787-9 Dreamliner aircraft are intended for use on medium-haul and long-haul international routes.
Q: Vistara had recently announced its “Vistara Freedom Fares” which will act as fares of low-cost carriers (LCCs). Since Vistara was launched as a full-service airline, does the introduction of this fare indicates that Vistara could in future launch a different segment of LCCs given that the other LCC players in the aviation market are giving cut throat competition?
A: Vistara is a full-service carrier. We are confident and deeply committed to our business model. “Vistara Freedom Fares” is only the introduction of a menu-based pricing model, which is designed to empower travellers with the freedom to choose the kind of fare and services that suit them best, enabling them to plan their journeys their way. It simplifies flying for travellers and, we believe, can be a game-changer in the industry. It is a novel concept that the biggest and the best airlines all around the world have adopted in response to customer needs. Our offering, obviously, is unique and tailored for Indian travellers. Eventually, we’re only giving options to our customers, empowering them to pay for what they value. It is logical and only means good for customers. At Vistara, we spent months exploring multiple possibilities and in understanding what works best for new-age travellers, who have varied preferences. Lite fares address those customers who simply want the lowest fares and no other frills, and this is a segment of customers that we had, perhaps, not appropriately addressed hitherto. And it must be noted that “Vistara Freedom Fares” are not just about Lite fares, which is just one of the fare types in the programme. Our Standard and Flexi fares offer lower and free changes/cancellation fees, respectively—and both come at very affordable add-on price. As a full-service carrier, our USP is that we are a customer-centric brand, committed to redefining air travel in India with innovative propositions and excellent service delivery. Our new customer-empowering pricing model only reiterates our USP and what we stand for.
Q: Despite the fact that the Indian aviation market is growing a year-on-year basis, the airlines are not showing a huge profit. What are the key challenges in the way of running a profitable airlines business?
A: Indeed, the growth of the Indian aviation has been phenomenal. At the same time, the rise in fuel prices, the depreciating value of the rupee, combined with state taxes on ATF, high parking, landing, navigation and other such high-cost contributors, make the business challenging for airlines in India. It is a market where yields are among the lowest in the world and taxation is among the highest. We’re hopeful of the government’s continuous efforts in this direction that will eventually ease airline businesses.
Q: The development of aviation infrastructure in India is being talked about when the market is growing rapidly. As an operating airline, where and how do you think that the infrastructure could be improved for smooth functioning?
A: Infrastructure-related issues, including but not limited to runway shortage, slot and airport capacity constraints, require immediate and targeted solutions.
There is a sharpened focus on infrastructure development by the government. It is heartening to see that the government has rolled out some very ambitious initiatives in the recent past. In consultation with all stakeholders, it has revisited existing policies and introduced new ones that are pro-business and pro-consumer. The government’s vision of enabling a billion passenger trips a year addresses several needs, the most important being that of a better infrastructure.
We’re very hopeful that these steps, coupled with the growing demand for air travel in India, will elevate the country’s position in the global market.
Q: Vistara has so far stayed away from participating in the UDAN scheme for regional connectivity, while most of the Indian airlines have participated in it. Do you think it is an opportunity missed and would you like to participate in the future rounds of bidding?
A: We support the government’s UDAN scheme and view it as a landmark step in Indian aviation. However, due to our relatively small scale and size at present and the absence of suitable aircraft to operate on routes under the scheme, we could not participate in it. However, we do not rule out the possibility of doing so in the future.