Airlines under Tata umbrella rivals for now: Vistara CEO

NEW DELHI : Full-service airline Vistara will continue to view other airlines under the Tata umbrella as competition until there is a decision from its shareholders on the future of its identity, chief executive officer Vinod Kannan said. After seven years of operations, Vistara, a joint venture of Tata group and Singapore Airlines, recently secured the No.2 spot in the domestic aviation market, with a 9.7% market share in August. Edited excerpts from an interview:

What is the future of Vistara amid merger talks with Air India?

There have been various reports in the media. We are not involved in this discussion because we are an interested party as Vistara, but we will wait to hear from the shareholders. What I tell my team is that regardless of what the decision is, we still have these 70 aircraft which have to fly and those seats that we have to sell, and they are not going away.

Do you view AirAsia India, Air India, and Air India Express as rivals?

From a competition perspective, we treat all these airlines as competition, although we are part of the same group, and that is how we approach it internally and with the customer. In fact, we operate a lot of parallel routes between ourselves, and that is likely to be the case until we have some decision or guidelines. So, we continue to operate at arm’s length with these airlines as competitors, and that will continue.

Would you wait for clarity on merger talks before finalizing fleet order?

There is no direct correlation between the two. The Indian market is such that especially after covid, wide-body direct flights will be preferred. There will be enough demand, and regardless of what happens, there will be scope for us to grow.

What is your understanding of domestic demand now?

I don’t think we are back to pre-covid numbers in totality, but again, we have to be mindful that July-September is kind of the weakest quarter of the year for airlines. Having said that, for Vistara, July and August have been strong. The numbers that we have carried are better than pre-covid. It is also a function of capacity that we deployed. We are now sitting at around 25% over pre-covid levels at about 250 flights every day. We hope to ramp up to 270-280 flights in the coming months. Demand has come back and eased for us. As an industry, a lot will depend on the festival season starting next week. I am quite confident that we will hit pre-covid numbers.

Will Vistara add more all-economy aircraft to cater to the domestic sector?

At this point in time, today, I sit at 53 aircraft. At the end of 2023, I will hit 70. We are looking at about seven Boeing 787 aircraft, including six of our own and one on a lease, which is coming. Another 10 will be A321s which would be for regional international routes like Singapore and Dubai, and the remaining 53 will all be A320s. Of the 53 A320S, 10 aircraft will be all-economy, and the remaining 43 will be the traditional three-class that we have. At this time, I have seven of the all-economy, so three more will be delivered between now and end of 2023. Even on all-economy, we are operating as full-service.

Will Vistara opt for a two-class configuration in its aircraft?

I don’t think we are going down that route. Of course, we are operating a two-class on the Boeing 737s that we took after Jet Airways’ suspension. We have five of those aircraft. Three will leave the fleet by the end of this year but by the middle of 2023, the remaining two will also leave, so we will gravitate towards a three-class or an all-economy aircraft.

Supply-chain issues are impacting aircraft deliveries. Does that concern you?

Aircraft deliveries take a while, but there are offers available on the secondary market. So, there are offers from lessors that we can look at. So, on a short-term basis, we can look at interim fitting of capacity. It is not so much of a concern; we know that if we need to, then we can get offers on the market. We are always engaged with the OEMs and the lessors, but the priority for us right now is to make sure we get the remaining aircraft of the 70-aircraft order. There have been delays to the Airbus aircraft, and on the Boeing side, our main ask is to get clarity on when we are getting the remaining four B787s.

How are the fare levels holding up?

Given the fuel prices at this time and the dollar being strong, we have seen an upward movement in fares. I presume that for the coming peak season, there will be enough demand to sustain strong fares.

Will Vistara add more tier-II cities to its network?

We have complemented our international growth with some domestic connectivity. We are still looking at some domestic destinations; those are still a work in progress.

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