TravTalk India Online Magazine
Vinod Kannan, CCO, Vistara, says that the airline will add close to 40 more aircraft to its fleet by 2023, while using its existing fleet to densify its network. He adds that while the pandemic did throw challenges their way in terms of ticket refunds and revenues, they managed to power through by beefing up cargo operations.
Nisha Verma
Please elaborate on your international expansion plans. Which are the destinations being covered and will be covered in future?
We remain committed to our long-term expansion plans, despite the challenges posed by the ongoing pandemic. There is an inherent need for an Indian carrier with a modern fleet, world-class cabin products, and onboard service to fly within and outside of India. And we believe that Vistara is uniquely positioned in the market with a clear, competitive edge.
We intend to add nearly 40 more aircraft to our fleet by 2023, including wide-body and narrow-body aircraft, to densify our network within India and expand on international routes. We recently inducted our second Boeing 787-9 Dreamliner and our first A321neo aircraft, despite the delay in these deliveries caused by the outbreak of COVID-19. We plan to use our existing fleet as well as the new narrow-body aircraft, including the A321neo, to fly to international destinations within the range of 3-7 hours at the earliest opportunity and also to densify our domestic network. The Dreamliners will be used for long-haul operations, to fly to destinations within 11 hours of flying time in the first phase. The choice of our codeshare partners may be indicative of the long-haul destinations that we want to add to our network.
At present, we’re operating special international flights to Dubai and London Heathrow as part of the ‘transport bubble’ formed between India and the UAE and the UK. We are also reviewing similar opportunities to operate special flights to Paris and Frankfurt.
What about the domestic plan, especially in COVID times?
Even after three months of resuming flights post the lockdown, demand for air travel within India is rather slow, especially with states imposing their respective travel restrictions/quarantine requirements. The industry average of load factors continues to be in the range of 50 to 60 per cent though there has been some upswing in demand in Aug We are currently operating at around 30 per cent of our capacity to 26 destinations, but are constantly reviewing our network, assessing viability on various routes to optimise our network in response to market forces, and hope to gradually ramp up domestic operations as situation normalises.
What impact did Vistara see on its business during COVID, and what has been the survival strategy for you?
The impact of COVID-19 on the aviation industry has been truly unprecedented. With the temporary suspension of operations during the nationwide lockdown, there was a long period of no revenues that led to depleting cash reserves, while some of the significant expenses/fixed costs continued for us. Of course, this resulted in severe financial impact and we have since been pursuing several measures to reduce non-customer facing operating expenses and are making every effort to conserve cash wherever possible. This includes renegotiating various contracts with partners, vendors, and lessors. We also had to make the difficult decision of temporarily reducing some of our staff cost with the singular focus on preserving all jobs.
During the lockdown when commercial operations were put on pause, we quickly beefed up our cargo operations to generate some revenue. In fact, we deployed our brand-new Boeing 787-9 Dreamliner aircraft, in addition to our narrow-body aircraft, for cargo operations as well.
Once domestic flights resumed, we deployed our Dreamliner for domestic commercial operations on viable routes with an aim to efficiently utilize our resources. We operated a few international repatriation flights under the government’s Vande Bharat Mission and some charter flights as well.
We have also been exploring other viable business opportunities in the effort to generate additional revenue. For example, Vistara became the first carrier to have introduced another ancillary service that allows passengers to book an extra seat for themselves to ensure that the next seat is empty – to encourage travellers to fly with greater confidence.
What kind of engagement you have with the travel agents? How did you handle the agent/ customer refunds during lockdown?
One of the biggest challenges for an airline during the lockdown was the uncertainty of the period of suspension of operations. This led to cancellations of flights in phases, which we believe, made customers anxious at the time and in turn, built up pressure on travel agents as well. It was truly a situation beyond anyone’s control – one that affected all stakeholders in the ecosystem. In the meantime, guidelines on refunds were issued by the ministry, which we adhered to and processed customer requests accordingly, even though they might have taken slightly longer than usual. Bookings that were not eligible for refunds were extended for a longer period for customers to use them at their convenience.
Communication with our trade partners and customers remained a top priority for us to provide the clarity we could in these unusual times, and we made our best effort in this regard.
With A321neo, Vistara is expanding its fleet. How many new aircraft will you be inducting in your fleet?
In 2018, we had ordered a combination of 13 purchased and 37 leased aircraft, totaling 50 from the Airbus A320neo family. We have already inducted some of those aircraft, and we expect deliveries of the remainder in the next few years. Additionally, we had purchased six Boeing 787-9 Dreamliner aircraft, two of which are already part of our fleet. As of now, we are on track to take deliveries of the remaining four Dreamliners by 2021.
What kind of offers/ plans you are offering to recreate demand in aviation?
We have announced a few special offers for customers since domestic flights resumed on 25 May 2020 to stir demand to whatever extent possible. Such offers have been rolled out in complete compliance with the Ministry’s guidelines. Recently, we announced an exclusive offer of a 20 per centdiscount on Award Flights and Upgrade Awards on all Vistara flights for bookings made between 20 August 2020 and 03 September 2020 for travel until 31 October 2020. We also introduced a new cabin upgrade program in partnership with ‘Plusgrade’ enabling customers to opt for purchase instant cabin upgrades or bid for an upgrade to higher cabin classes.
Please share the details of the SOPs Vistara is adopting to offer a safe and hygienic journey for its customers.
In order to ensure the health and safety of our customers and staff, we are taking many measures, in line with the regulatory guidelines, including regular health checks for crew; avoiding non-essential contact between crew and passengers; no onboard sales, reading material; intensified aircraft cleaning procedure and deep cleaning every 24 hours; HEPA filters on all of Vistara’s aircraft; and providing a safety kit consisting of face mask, face shield, and sanitizer is provided to each passenger. To rebuild passenger confidence in flying we launched an integrated campaign #FlyingFeelSafeAgain, aimed at generating awareness about air travel being the safest mode of travel during the Covid-19 crisis.
Box:
Vistara recently conducted a customer survey in June 2020 in which 65 percent of the respondents mentioned that they expect to take their next Vistara flight before December 2020. 25 percent of them indicated that they would fly to visit their friends and relatives, while 35 percent of the respondents expected to fly for business. 69% of the respondents rated Vistara 8/10 or higher in terms of their confidence in the airline for ensuring their health and safety while travelling.
