Full-service carrier Vistara, a joint venture of the Tata Sons and Singapore Airlines, will soon be merged with Air India, putting an end to the brand’s eight-year journey. Vinod Kannan, CEO, Vistara, talks to Akanksha Nagar about the challenges any merger throws up and why the airline continues to add routes and aircraft as it prepares to devolve into another brand. Edited excerpts:
How would you sum up Vistara’s eight-year journey and what values would you like the company to uphold as it prepares to merge with Air India?
We started with just two aircraft and right now, we have a fleet of 61 aircraft and will hit a fleet of 70 by March-April 2024. With a team of 5,500 staff members, we operate in 32 domestic and 15 international destinations and last week, hit a milestone of carrying 50 million passengers. Looking forward, what we want to carry into the merged entity is the spirit that we have built in the company, the very thought process of customer centricity, and how we approach our interactions with customers. The merger right now is subject to various approvals — hence we still operate independently, which is why recently Vistara also announced additional routes, including flights (in June) between Mumbai and London. As a brand, we continue to invest in various aspects of products and services, for instance, in-flight live TV screening or WiFi for connectivity—things that are relevant and meaningful for the customers that will continue even after the merger.
So why are you continuing to add routes and aircraft?
While the expansion of destinations is still in progress, the remaining order book has the delivery of three more Boeing 787-9 Dreamliners, four are already in the fleet. Our focus will be to improve the connectivity to existing points. For instance, Vistara currently operates 5x weekly flights between Paris and Delhi and 6x weekly flights between Frankfurt and Delhi. Going forward, we would want to connect Paris and Frankfurt from Mumbai, because it is our secondary hub. We are also looking at some destinations in North Asia, we used to operate in Hong Kong and Seoul (under the air bubble agreement), and these are all areas that we are trying to get back into, so international expansion will continue. Currently, about 25-30% of our capacity is deployed on international routes and we want to get closer to a 35-40%, and that will be our focus, by the end of this fiscal. We only started flying internationally in 2019 and about 30% of the passengers are international and the remaining are domestic.
What is the outcome you are looking at?
In December last year, the company hit the revenue mark of $1 billion and for the last fiscal, it closed at a top line of more than $1 billion. This fiscal, our attempt would be to improve that even further and there’s reason to be positive because the airline is adding another 10 aircraft, which brings growth with it. We are now operating over 270 flights every day, sometime early last year it was only at around 220— it has grown by about 20 to 30% in terms of flights, and therefore that translates into revenue. Also, what helps us as an airline that is based out of India and that flies direct to a lot of destinations is the preference for nonstop. It is also something that will come back to give us dividends.
How is the airline’s management preparing for the ‘tough’ transition?
Any merger is going to be tricky and most brands that come through this will say the culture integration is the toughest part of any merger. The good thing for us is that we are a relatively new organisation that’s achieved quite a bit and it is pretty much motivated to see how we can apply some of these learnings and wins on the Air India side. It’s a process of constant communication and trying to make sure that the staff are motivated to perform here and then looking forward to performing in the new entity as well. From a cultural perspective, the solace we have is that shareholders or the owners on the Air India side will also be the same, as that we have with Tata Sons and Singapore. In any transition, the biggest challenge will be people, in terms of how they remain motivated and how we give them the assurance that they will have a good smooth landing on the other side. So these are things that I and my team are working on very hard.