The Indian aviation industry is seeing some “green shoots,” according to Vinod Kannan – Chief Commercial Officer – Vistara. The Tata SIA Airlines aims to achieve pre-Covid level air traffic by the end-December 2021, provided the third of Covid-19 does not hit India hard.
Speaking to BusinessLine, Kannan shares the company’s plans to tide through the possible third wave of cases. The CCO also talks about emerging competition and the potential change in dynamics if Tata Sons acquired Air India.
From an industry perspective viz a viz with Vistara, when do you see pre-Covid level air traffic coming back?
Overall, there is some semblance of return industry-wide. While pre-Covid level numbers are afar, there is recovery to some extent. As we head towards the holiday season and year-end, it will get better.”
For Vistara, I would like to see pre-Covid numbers by the end of the calendar year. That is if the third wave doesn’t hit us hard and the festival season fares well. Though the situation is still dynamic, we have seen a seasonal pickup. We are looking at the SME segment picking up and parts of corporate travel showing green shoots too. We have also seen the load factors improving-there seems to be a gradual return to demand.
In case the third wave happens, what is Vistara’s strategy to mitigate losses?
We won’t stop the process of expanding and looking at viable routes. Albeit, we will be extremely nimble about where we operate and what we will be doing in terms of a demand downturn. As a fallback option, Vistara aims to escalate its cargo and charter flights.
Vistara has been aggressive with its international route expansions. It has participated in the global air bubbles to at least seven points and would like to operate to more points subject to approvals.
We have been cautious and prudent on the domestic front to only operate on routes where we are not burning cash. We have also adopted the hub and spoke model with an aim for a meaningful network. All of this will help us for a quick turnaround.
What boosted Vistara’s market share?
We have been quite progressive in terms of deployment. We have not gone back into our shell because of Covid; we have grabbed opportunities. This other thing is our brand, which has led people to travel via our brands. We have also expanded our international network.
We were trying to adopt a hub and spoke model. It is often believed that there is significant travel from metro cities to international destinations. Not all who travel on Vistara come from metro cities. Demand comes from other cities like Bangalore, Chennai, and Hyderabad. Hence, we will try and build a network where we can feed and de-feed.
Two new airlines are in the fray. How does it impact the industry? Does Vistara have an edge?
Competition makes you stronger and owns your skills better. There is no reason why players should not enter the Indian market. Of course, the timing might be questionable, but it is probably the best time to get the best deals.
As for Vistara, I would say yes, we do have an edge. In terms of what kind of customers we are targeting, our international network, a modern fleet. Many soft features make us different like wifi, charging ports, meals, customer service, and the crew’s service on board.
What are your comments on the possible acquisition of Air India by Tata Sons? Do you see the dynamics changing for the company post purchase?
I cannot comment much on it. We are all in wait and watch mode, but at the moment, Vistara is and will be run independently unless told otherwise.
Air India has a brilliant network, slots, and aircraft. Won’t Vistara benefit from it because it has a lot of synergies?
The fact that we are both full-service carriers is similar. In terms of slots and rights, AI does have a lot of these. However, in terms of modality, I don’t know what will happen for both carriers. Albeit the kind of expansion we have had despite Covid, we’ve understood that other models can be worked out well.
Overall, Covid-19 might change the industry forever, many airlines could shrink, some will give up their slots at some important airports because they don’t have the aircraft or cannot operate them at the moment so there are opportunities that we can exploit with or without Air India.
Is the best set of 787 arriving with crew rest facilities needed for ULH flights to the US?
There are certain aspects that the FAA has pointed out which Boeing is trying to rectify them and that depends on those timelines as well. We should have had few aircraft, in fact, six aircraft by early next year mid next year, but it depends on Boeing’s timeline and depending on that, then we will take a call on crew rest.
Are you then looking at revamping the business product on the 787, which is not ideal for ULH?
The business class product that we have on 787 is no worse than many international airlines are using it for ULH, but there is no plan to upgrade that at this point. We have had very positive reviews on that in the European sectors and many airlines are also using this product for ULH. If it comes to that, we will be looking at the same product, and we are not looking at any additions to the renovated products.