A year after starting its operations, the country’s youngest full-service carrier Vistara has been trying to increase capacity, expand networks and reduce the business class seats to attract more passengers. “We will also be offering more choices of destinations and improving the timings of our flights based on customer feedback. We are also gearing up to expand the footprint by 50% in 2016,” Phee Teik Yeoh, CEO, Vistara told FE.
At present Vistara flies to 12 destinations including four metro cities – Mumbai, Delhi, Bangalore and Hyderabad with nine Airbus A320 aircraft and operate 365 flights in a week. But the number of flights operating from important places like Bengaluru and Hyderabad are very less compared to its competitors.
Vistara does not operate on the Bangalore to Hyderabad route which are the two biggest information technology hubs of the country. It operates only two daily flights between Delhi and Hyderabad and only one direct flight between Delhi and Bangalore. In order to remain competitive the airline has reduced the ticket prices where it can be compared to low cost carriers like Indigo and SpiceJet.
“We are a new airline and we plan to stay true to our course of steady and sustainable growth. We are also young and nimble and are learning and improving every single day,” added Phee Teik.
The airline is concentrating on the Delhi to Mumbai route in which it operates eight flights daily.
Notwithstanding a good on time performance which is close to 90%, the market share of the airline in 2015 stood at 1.3 % while the passenger load factor (PLF) stood at 77% in December.
During the January to October period the PLF struggled to cross 70% mark, as a result the management decided to cut its business class seats, reduce ticket prices and offer 2% concession to the travel agents on ticket bookings. As a result the PLF in the November and December improved to 72% and 77.6%, respectively.
“Demand for the business class was relatively low and the growth witnessed can be attributed primarily due to a strong demand for the economy class. We are also required to operate on regional routes which have minimal business class demand,” explained Phee Teik.
As a consequence of the reduction in business class seats, the brand image of the airlines may take a hit and customers who eye for business class travel may move to competitors like Jet Airways.
“The number of flights from Hyderabad and Bangalore are very less and it is difficult for us to sell Vistara tickets as the time slots are not convenient. Also a lot of their business class seats are remaining vacant which is also a concern,” said Jyoti Mayal, chairperson of Airline Council.
Recently, Vistara announced that travel agents will be offered a 2% incentive on every ticket booked which is one of the reasons behind the increase in the passenger load. While starting its operations in India, the full service carrier had a policy of not offering any concession fee to the agents.