Expect recovery in personal, leisure travel soon: Vistara's CCO Vinod Kannan
_1624529142238_1624529221205.jpg "Vistara chief commercial officer Vinod Kannan said that the demand is slowly coming back and expects a return of 70%-80% capacity in the coming months")
Premium- Vistara continues to expand its operations, especially on the international front, and hopes to have 70 aircraft in its fleet by 2023
NEW DELHI: Vistara, a joint venture between Tata Sons and Singapore Airlines, expects a recovery in travel for visiting friends and family, and for leisure soon as more people get vaccinated in the coming months.
The airline will continue to expand its operations, especially on the international front, and hopes to have 70 aircraft in its fleet by 2023, the airline's chief commercial officer Vinod Kannan told Mint. Edited excerpts from an interview.
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Do you think a recovery is likely in the coming months with the looming fear of a third wave of the covid-19 pandemic?
The aviation sector has been facing its most challenging times due to high cost of business, muted demand and looming uncertainty. But we remain sanguine for better prospects in the future. We understand that people’s travel plans have been held back due to various reasons like travel restrictions, rapid spread of the virus in the second wave etc., and going by the trend, we hope they will resume as soon as the situation gets stabilized. With vaccination drives across the country and various other government initiatives, customers today are more confident than before. Hence, we expect some level of recovery in VFR (visiting friends and relatives) and leisure travel soon.
Currently, there is a 50% capacity cap for airlines. Do you think there is enough demand now to extend this cap?
The industry has come out of a period of complete lack of demand which has just started to show some improvement albeit gradually. We believe the demand is slowly coming back and we can see a return of 70%-80% capacity in the coming months, and hopefully 100% in the fourth quarter (October-December 2021 period). We are closely observing the demand across our network and assessing viability across various routes to ramp up capacity in a phased manner.
What is your position on the government temporarily capping airfares at least till 31 July?
Airfares in normal circumstances are a function of market dynamics. We believe that free market pricing is the best way to manage supply and demand. Having said that, we understand the rationale behind the government’s decision to temporarily regulate fares through fare caps.
Your international plans have suffered from a setback from covid-19.
As it is evident by now, Vistara is in the game for the long run. We are fortunate to have been able to expand our international network during the pandemic, albeit with limitations and as part of ‘air bubble’ agreements. These operations have not only helped us introduce Vistara in markets that were already part of our expansion plans, but also helped us to make inroads into new geographies, paving way for a strong foothold for Vistara in global aviation.
During this period, we expanded our network to eight international destinations including London Heathrow, Dhaka, Dubai, Doha, Frankfurt, Sharjah, Malé and Tokyo. I am sure the experience of operating these routes will help us in our long term international plans.
How do you want to gradually expand once the restrictions are lifted?
Our A321neo aircraft are intended for flights to international destinations within the range of three to seven hours of flying time, which could cover points in Southeast Asia, Central Asia and West Asia. For long-haul routes, we’re currently using the Boeing 787-9 Dreamliners to fly to destinations within 11 hours of flying time.
However, as we go along, we intend to fly to farther destinations, such as the United States. The strong preference for non-stop, direct connectivity amongst customers has been a source of encouragement for us.
According to data from MCA, Vistara's pre-tax loss for FY2020 widened to ₹1,814 crore compared to ₹831 crore in FY19 due to higher operating costs. The airline is expected to report higher losses due to the pandemic. How are you planning to address the FY 2021 losses?
Since the outbreak of the pandemic, we took several measures to reduce non-customer facing operating expenditures while making every effort to conserve cash wherever possible. We continue to leverage opportunities such as commercial cargo, charter flights, and introduce multiple ancillary services in our effort to generate additional revenue. Our broader focus is to achieve and maintain a lean and efficient cost structure while exploring newer avenues to supplement our earnings.
Has the airline resorted to any Leave Without Pay (LWP), salary cuts for employees during the second wave?
In the FY 2021-22, we reinstated salaries of all junior to mid-level Vistara employees effective 01 April 2021. We have also reversed the 10% pay cut for our pilots. Vistara’s Leadership, however, continues to take pay cuts between 15% and 25%.
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