New aviation policy turns 5/20 to 0/20; Vistara CEO says foreign flights by 2018

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Updated: June 16, 2016 7:51:29 AM

The government on Wednesday scrapped the 5/20 policy and replaced it with 0/20. Vistara Airlines – a joint venture of Tata and Singapore airlines...

Vistara is more focused on sustainable and profitable growth. (Reuters)Vistara is more focused on sustainable and profitable growth. (Reuters)

The government on Wednesday scrapped the 5/20 policy and replaced it with 0/20. Vistara Airlines – a joint venture of Tata and Singapore airlines – will be one of the beneficiary of this change. In an exclusive interview, Phee Teik Yeoh, CEO, Vistara Airlines told FEs Malyaban Ghosh that the airline will have a fleet of 20 aircraft by 2018 when it may be eligible to start its international operation. Excerpts:

The government has scrapped the 5/20 policy and replaced it with 0/20. By when do you think Vistara will be able to start international operations by having 20 aircraft in its fleet?

With the 5/20 rule scrapped, we will be ready to fly international by June 2018. Removal or the easing out of this rule will be beneficial for the country. As we gear up for our international operations many pilots are enthused by the opportunity to fly on international routes. This is the correct time for pilots to join Vistara. However, the recent rules on cancellation charges, putting a cap on the refund and other charges like on excess baggage, we think that these are a part of the price of the product and when it comes to pricing we think that the government should let market forces prevail.

Are your happy with the way Vistara has performed in the domestic market?

When we started our operations in Delhi the first destination was Mumbai and it was followed by Ahmedabad. Over the last 17 months we have expanded our network to 17 destinations which is equivalent to one destination per month. We have maintained a very lean cost structure internally and flush out inefficiency wherever it is possible. We have lined up quite a few announcements of our partnership with other brands in the next few months and will enhance our frequent flier programme as well. We have grown our footprint rapidly in the last 17 months. Vistara just launched its operations in Kolkata which is the first city in the East. We are planning to expand to more cities when 12th and the 13th aircrafts will be inducted. Our intention is to increase the utilization of aircrafts and decrease the turn around time of them in the current year.

How many pilots Vistara plans to recruit in order to expand it operations?

We are planning to recruit 50, rated and non rated pilots for our upcoming two aircrafts that we plan to induct in the current year. We have also increased the remuneration of the pilots to be competitive in the market. We have also launched a trainee flight first officer programme (TFO) where we can train the pilots. This way we can have a steady pipeline of pilots from with in the organization.

How has been the demand for your business or premium economy class?

Pick up rate for the premium economy segment was slow to begin with as many corporates do not have premium economy in the travel policy. So what we have done is to educate the corporates about premium economy class. The price difference between the premium economy and economy class seats have just been reduced to R1,000 sometimes and one gets to enjoy a better product as a result. So this product is here to stay and we have seen better demand of this product in the recent months because of the unique proposition of the product. We have taken the hard decision to reduce the capacity of the business and premium economy class in October last year.

How do plan to increase the market share?

We have seen our market share grow to 2.3% in April and intend to continue to grow by exceeding our customer expectations. We plan to increase our network by inducting more aircrafts. Two A320 neo aircraft will be inducted this year and another seven A320 Neo aircraft will join our fleet by 2018. We are not in a market share game and have not set any target for us. Vistara is more focused on sustainable and profitable growth.

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