'It was the best time to enter the Indian aviation market'

'It was the best time to enter the Indian aviation market'

Vistara, the Tata Sons-Singapore Airlines joint venture, has hit the skies after waiting in the wings for about 16 months. It believes that for a full service airline and value-based offering, its fares are “quite competitive” compared to other airlines. Phee Teik Yeoh, the CEO of Vistara, spoke to Deccan Herald’s Shemin Joy. Excerpts:

Two weeks into operations, how is the market responding to you?

We are delighted that our customers are responding positively to our product and service. At Vistara, customer satisfaction is a key priority and we diligently monitor feedback we receive from them. Each feedback coming in makes us optimistic of the customer confidence and even more determined to focus our energies on exceeding customer expectations again and again and win their loyalty.

There are some concerns that the Vistara fares are a bit high. How do you react to it?
We are closely watching the market dynamics since we started sales almost a month ago. Fixing fares is a complex and dynamic exercise and depends upon various factors. We aim to be disciplined in pricing as our strategy is determined by the unique value proposition we offer. We hope travellers in India find our fares, value for money. Since launch, we have received overwhelming response to our product and service and through our competitive fares we hope to reach out to more and more travellers to try our unique product and service propositions.

Indians are more used to travelling in low-cost carriers.
We want the customers to experience a true full service carrier. We want them to know what defines full-service. Many would say free food on board. But our definition of full service goes beyond food. It is about end to end customer experience both on ground and on-board and this is what we intend to bring about in the Indian aviation landscape. The experience starts even before they come to the airport. It starts the moment they contact our travel agent or customer service or then get on to our website.

One important aspect is more comfortable seating. The number of seats we have on-board is up to 20 per cent less compared to many of the single aisle aircraft operators. Instead of cramping more seats into the aircraft, we are sacrificing seats for the greater comfort and personal space to customers. Some more differentiators include better staffing ratio, improved amenities, sumptuous meals etc., along with the others that are in the pipeline and will be announced soon like interlining possibilities, lounges etc.

Is there enough space for a full service carrier in Indian skies?
Well, when you look back to what has been happening in the past 2-3 years, the lines between full services and low cost carriers seems to have become clouded. In fact, sometimes low cost carriers charge more than full service carriers. There is a definite blurring of lines in terms of airfares. Sometimes, you also get confused whether there is a reasonable difference between product and services other than the free food you get on board.

Actually, some of the corporate customers get free food on low cost carriers. Because of the blurring of airfares, how much the passenger has paid is, at times, not aligned to the product and services he gets. If the product and services they get is of value, then they will be prepared to pay a wee bit extra. If there is no difference, why should anyone pay more? We would like to look forward.

At the very inception, we conducted a consumer survey to get a sense of what is missing in this market. A lot of customers told us they were missing out a few key factors. Whenever they travel with any carrier in India, they enter into a “state of vulnerability”. They say they feel a loss of control once they enter an airport as they don't know where to go, they don’t know whether the security queue is going to be long and there is a lot of confusion. They have a “feeling of anxiety”. They also feel “loss of individuality” and just like one of the many passengers. Everybody is treated the same. This was the insightful feedback from fliers which we took into serious account while planning our product and services.

With the economy improving, do you see people shifting to full service?
If you look at the number of aircraft operated by Indian carriers, it is about 400, Chinese airlines operate around 1800 aircraft. The seat per capita in India is far behind many countries such as Australia, China, US, Japan. So, there is an immense potential and the sector is looking up. All the economic indicators are pointing in the right direction barring one or two.

Inflation is at an all-time low, fuel prices have plummeted. That is a big bonus to airlines in India though we wish the savings are passed on to the players. The fuel prices have decreased by around 50 per cent between now and last June but airlines here have only got a 26 per cent benefit.  Nonetheless, this is an overall optimism in the environment and I feel the time to enter the market couldn’t have been better.

How do you expect the market to respond to Vistara?
Unfortunately for several years in India, the difference between the two categories of airlines has been all about food, which is actually a small part of the services. We are hopeful and convinced again that once customers experience our product and services and realise what they were missing out, they will then be prepared to pay a slight premium for not just the food, not just ample leg room, but also the end-to end-experience.