We have a sea of opportunities to seize, says Vistara CEO

Vistara, the Tata-Sons-Singapore Airlines joint venture, entered the Indian skies by flying from Delhi to Mumbai on January 9 last year. As Vistara completes one year of operations, its CEO Phee Teik Yeoh responds to queries of Deccan Herald’sShemin Joy. Excerpts:

Vistara is completing its first year in January. How was the first year journey?

The last one year has been rewarding for all employees at Vistara. We are delighted to see the way customers have embraced us and appreciated the unique value proposition that manifests the heart and soul of both Tata and Singapore Airlines. It is also a matter of pride for all of us at Vistara as we touched our one-millionth customer within 12 months of operations.

We have also brought in a combination of operational excellence, such as high reliability, consistent on-time performance and service excellence that make us different from the rest. We are pleased with our performance so far and we are confident that it will get better as more and more customers experience our product and services. Our customers are highly appreciative of the differentiated product and service elements– whether it’s our trendsetting Premium Economy class, innovative menu, unique value based FFP (Club Vistara), our auto check-in process, our seamless ground experience or simply the warm and genuine smile of our cabin crew – they have all given the travelers in India a whole new positive meaning in flying experience.

Our growing popularity among customer got validated in the Conde Nast Traveller: Readers’ Travel Award for being the 2nd best domestic airline in India. Notwithstanding our less than 2% market share, we were nominated by a large community of reader travelers as their favourite airline, establish that Vistara exceeded their expectations on each and every encounter. What differentiate us from the rest is that we have managed to demonstrate that the service delivery need not be robotic but warm, genuine, personalized and experiential.

We are a young airline and we plan to stay true to our course of steady and sustainable growth. We will be adding a host of new elements to our product and service portfolio, which will further delight our customers.

What is in store for the next year? What are the opportunities and targets ahead for Vistara? Will you be adding more destinations this year?

Given the dynamic operating environment, and the surge in passenger growth that the industry experts have foreseen, we are geared up to expand our footprint and strengthen our value proposition further to cater to our customers in the best possible manner. Our strategy is focused on steady and measured growth. Today, we have nine aircraft and we serve 12 destinations with 307 weekly frequencies. In 2016, there will be an addition of four more aircraft to our existing fleet. With that, we will introduce new destinations and increase frequencies to the existing network allowing us to offer more choices to our customers. By the end of 2018, we will have a fleet of 20 Airbus aircraft including seven neos.

We also look forward to a progressive aviation policy that would allow us to start our international operation soon. We would like the international travelers to/ from India to enjoy Vistara experience. Our long-term vision is to become the preferred full service airline of choice known for its exceptional customer service and we are steadily progressing towards it.

We are an innovative organization and we will continue to add a slew of value added elements to our service portfolio to give our customers new reasons to fly Vistara. From February, our fleet will be incorporating the most advanced in-flight entertainment system of wireless streaming of highly engaging audio video content across all three cabins. We are also looking forward to the launch of Vistara’s very own signature lounge at T3 in Delhi. There are quite a few strategic partnership lined up for announcement that will further enhance our value proposition for our customers.

In terms of future scope, we feel that being just a year old, we have a sea of opportunities to seize.

There is a perception that Vistara's 'premium economy' class has not clicked well. How do you view such comments? What are the reasons for it?

We came into the market with the aim to transform the flying experience in the Indian skies. With a performance and service-oriented approach, Vistara has brought credibility and a definite qualitative change in the way flying is perceived in India. We had come up with a novel concept in the form of our premium economy segment. Segregated check-ins, ample space, more meal choices, extra seat width for enhanced comfort, winged headrest and additional legroom are few of the benefits that customers enjoy in this section.

Cost saving with comfort and exclusivity is what our Premium Economy segment delivers. Over a period of time, the corporate travellers are warming up to this new concept and don’t mind paying a little extra for a lot more convenience. PEY is picking up and getting increasingly popular.  An endorsement of its growing appeal is the fact that companies have started adding this cabin as an option in their travel policy. We have observed that many CEOs and mid-level corporate executives are choosing our Premium Economy class product and appreciating the exclusivity and the comfort that it offers.

Sectors, which have traditionally been hubs for major commercial and tourism activities in the country like Mumbai, Hyderabad, Bengaluru, Pune and Goa, have seen an upsurge in the demand for Premium Economy considering that these attract a plethora of corporate and leisure travellers. Vistara offerings are consolidated deal for customers and not mutually exclusive between the comfort, punctuality, personalised services and pricing. The customers do not have to trade-off between these when they fly with Vistara.
 
Will you be changing the seat configuration? Can we see more economy class seats?

Being a new organization we are agile and flexible. We constantly review the market dynamics and see how we can better match supply with demand. We have noticed an encouraging uptake of our Economy class product and we are prepared to increase the seats in this cabin if the market dynamics are favourable. We are a full service carrier and we will stay true to our strategy. We are looking at right sizing our aircraft configuration and there are some options under consideration. We will share details with you as soon as we are ready.

Seat occupancy of Vistara is veering around 70 per cent while its market share has not crossed two per cent in the past one year. Is it worrying you?

Considering that we are barely crossed one year with a small fleet, we are satisfied with our market share and our performance, which has been improving gradually. While 1/3rd of our capacity is in premium class (business and premium economy) to which customers are warming up, our economy segment is doing better than the industry average. With every sector that we have added, we have seen increasing levels of customer confidence and loyalty.  Today, we offer an array of choices to our customers with a wider network base and increased frequencies across both metros and non-metros. Another factor is our industry’s best OTP since launch despite us having a small fleet, which does not give us enough flexibility to allocate other aircraft like other airlines with larger fleet.

So we are not focusing on market share. Our immediate focus is to promote our brand and expand our customer base by delivering personalized and seamless service delivered through intuitive thoughtfulness. The positive feedback that we are getting from our customers gives us the confidence that we will soon become the preferred airline in the country. Induction of four aircraft in 2016 will help us increase our presence in some key markets. In fact, recently we have increased frequencies to Mumbai and Goa routes to 8x daily and 9x weekly, respectively.

What are your fleet expansion plans?

In 2016, we will be adding four more aircraft to our current fleet of nine, which will result in enhanced connectivity to destinations important for domestic as well as overseas travellers to India. By the end of 2018, we will have a fleet of 20 Airbus aircraft including seven A320neos.

The Civil Aviation Policy is likely to be unveiled soon. What are your expectations?

We appreciate the efforts of the Ministry of Civil Aviation for coming out with a fairly comprehensive policy draft addressing all the known issues hindering the growth of the sector for years. We believe that the new policy will be progressive and will strengthen the industry to leverage the Indian aviation’s growth potential. Consolidating the aviation eco-system and providing a level playing field to all stakeholders in the sector will enhance ease of doing business, more collaboration and it is easily achievable. Ease of doing business can also be enhanced by simplifying RDG (Route Dispersal Guidelines) and leaving commercial matters like airfares and choice of destinations to fly to, to the airlines.

Cost of doing business can be pruned by rationalizing excessive taxes on ATF and lowering the high cost of airports. Focus on safety is paramount for Indian aviation to step on to the global platform and the draft policy highlights that clearly. Also, the 5/20 rule should be abolished unconditionally and immediately to benefit India as its removal will spur investment, tourism and employment. It will signal a liberal market friendly regime to Indian and global investors. It is time that the Indian aviation sector is allowed to reach its full potential by getting freedom from restrictive rules. We are optimistic that a pro-growth, pro-business, and pro-people policy will be announced soon that will catalyze the PM’s ‘Make-in-India’ vision.