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20-aircraft target by 2018 is just the tip of the iceberg: Phee Teik Yeoh, Vistara CEO

Phee Teik Yeoh, Vistara CEO, talks about his expansion plans and the company’s wait for the ‘5/20’ rule to be done away with.

By: | Published: May 23, 2015 3:05 AM

Full-service carrier Vistara, the country’s latest airline, is about to complete four months in operations. With a six-plane fleet, it currently flies to 10 destinations. Phee Teik Yeoh, CEO, Vistara, in an interview with Sunny Sen, talks about his expansion plans and the company’s wait for the ‘5/20’ rule to be done away with. Excerpts

With the new aviation policy being submitted for an inter-ministerial review, have you put together your international strategy? Expansion to a fleet of 20 aircraft is not enough.
We have planned 20 aircraft over four years. We already have six and three more will come this year. Next year, another four are planned and, by 2018, we will have a fleet of 20 planes. This is just the tip of the iceberg.

Growth will depend on the ‘5/20’ rule. It will change the game altogether. This 20-aircraft strategy is just for starters.

We are going to be an Indian carrier originating from India. We will have both short- and long-haul flights. We want to be a global carrier. Singapore Airlines has nothing to do with Vistara. It is just a 49% stake holder. We will chart our own destiny.

You will need a fleet of at least 50 aircraft to compete with the incumbents.
We are waiting for ‘5/20’ to be done away with. Twenty planes are not enough even for domestic operations. Our last aircraft gets (out of the fleet of 20) delivered in 2018. If ‘5/20’ goes away, depending on how our growth pans out, we will change course. We will tweak our growth strategy after seeing socio-economic development and plan accordingly.

How do you see your India business changing?
KPMG projects that India’s aviation industry will become the world’s third-biggest by 2020. We will have a combination of connecting tier-I and tier-III towns and cities. Our analysis says that not all tier-I cities are profitable and not all tier-III towns are non-profitable. We have chosen Delhi as our hub. We plan to get the businessmen back to their destination of origin by the end of day. We might set up another hub — either in Mumbai, Hyderbad or Bangalore.

You still have the lowest passenger load factor (PLF). Why?
We launched our operations at a time when travel was at its lowest. We have grown since. A comparison with other airlines won’t be apple-to-apple.

A third of our capacity comes from premium economy. We are unfazed by the PLF of the first three months. Vistara’s aircraft configuration is unique. We have only 96 economy seats, others have 180 — in the rest of the aircraft we have 16 business class seats and 36 premium economy seats. Many companies didn’t have a premium economy travel policy. That is changing now.

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