Vistara, still investing on expanding its fleet and network
Vistara is focused on improving connectivity within India, expanding and strengthening its presence across continents, and forging strong partnerships with many like-minded global airlines, to benefit their customers. Vinod Kannan, Chief Commercial Officer, Vistara, shares how the airline continues to seek new opportunities in these difficult times while remaining committed to its long-term growth strategy and remains optimistic about the new possibilities in time to come.
The COVID-19 pandemic not only impacted Vistara financially but also affected the pace of their expansion, given the various factors, including restrictions on capacity deployment, continued suspension of scheduled international operations, softened demand, etc.
They also have been nimble in their approach and taken several measures to reduce non-customer facing operating expenditures while making every effort to conserve cash wherever possible. “We renegotiated various contracts with partners, vendors, and lessors to reduce cost. With the intent of protecting all jobs at Vistara, we had to even take the painful decision of reducing some staff costs by implementing salary cuts. We have been actively working towards maintaining a leaner cost structure while exploring newer avenues to supplement our earnings. To this end, we have also been leveraging opportunities such as commercial cargo and charter flights, and also introduced other ancillary services in our effort to generate additional revenue,” shares Kannan.
Despite the challenges, Vistara has remained committed to its longterm expansion plans, albeit with temporary modifications. The airline sees great potential for long-haul direct flights from India, hence they have been steadily growing their global network under travel bubble agreements that India has entered with several other nations. They are staying on the course of their longterm vision and growth strategy of densifying their domestic network while expanding globally to become one of the world’s best airlines.
The demand for domestic travel has been steadily picking up since the last quarter of 2020. Kannan tells, “Today, people are more confident of flying than they were earlier, and therefore, it may be safe to say that domestic air travel has entered a phase of recovery. We have been gradually mounting flights in our domestic network, and we are already operating at nearly 75 per cent of our pre-COVID capacity. However, deployment of capacity continues to remain regulated by the government, and for airlines, it also depends on passenger demand. The Indian Ministry of Civil Aviation currently allows airlines to operate at a maximum of 80 per cent of preCOVID capacity.”
However, when it comes to international operations, there is a long road to recovery. The scheduled internationalflightsremainsuspended, and travel restrictions continue to evolve in many parts of the world. Although certain international routes continue to be viable for airlines to operate special flights as part of travel bubble agreements, the opportunities to scale up international operations are still largely limited. However, the news of the development and administration of COVID-19 vaccines from across the globe has brought considerable optimism among the aviation and travel industries. At Vistara, they are hopeful of a gradual return to normalcy across the globe, providing a favourable environment for restarting scheduled international flights.
“We continue to invest in expanding our fleet and network. Our experience during the ongoing pandemic boosts our confidence in our international expansion plans as we see a stronger preference for non-stop flights among customers. Vistara is uniquely positioned in the market with a clear, competitive edge to offer direct connectivity to long-haul destinations to and from India, especially as more wide-body aircraft are expected to join our fleet soon. While we are working out the delivery schedules of aircraft with Airbus and Boeing, we expect to receive the remaining four Boeing 787-9 Dreamliners in the financial year 2022 along with more from the order we placed with Airbus for A321neo and A320neo aircraft. Overall, we aim to have 70 aircraft by 2023,” reveals Kannan, while speaking about strategies for the future.
While the COVID-19 crisis has exposed the volatile nature of the business environment across the globe and as an industry, the airline too has gained valuable lessons on being better prepared for future challenges. “I think it is crucial for businesses to be agile to quickly adjust to the
changing dynamics. As a relatively young airline, we have tried to remain nimble in our approach since the very beginning. This has helped us in quickly adapting to the changes in several instances,” opines Kannan.
It is seen that various government and regulatory bodies have supported the aviation industry navigate during such turbulent times. However, Kannan feels that there is scope for improvement in the overall infrastructure like developing more airports to overcome challenges like runway shortage, slot constraints, capacity constraints, etc. However, with the government’s increased focus on infrastructure development, they expect the situation to improve soon. Also, the airline constantly engages with the government authorities, together with other airlines, for cohesive solutions for the industry and is hopeful of favourable outcomes as we move ahead.
This pandemic has made us all put safety and hygiene in a different perspective altogether. In this context, technology has played a very significant role by making several processes touchless, thereby reducing the risk of contracting the virus. Thus, at Vistara they believe, it is a trend that is going to stay. They expect a larger number of such technological interventions to transform the way we travel. IT infrastructures will become more sophisticated with greater use of technologies like AI, AR, VR, Robotics, etc. and the aviation industry will need enhanced processes and systems for passenger data collection in line with data privacy protection rules.
Another notable trend is the growing preference for non-stop, direct flights to avoid the risk of contracting the virus while in transit. Vistara has already witnessed this trend emerge and expect it to only get stronger in the future. Thus, with their plans for direct flights to major cities across the globe, they believe that they will be in a good position to meet these needs and demands.
For safety and hygiene for all, Vistara has introduced several tech-enabled processes to reduce physical contact between their staff and passengers. This is the need of the hour and is going to be the focus of the entire industry for a long time. They are investing significantly in this direction as well.
Bio-safety measures in effect today are based on the current environment and understanding of COVID-19. “As the situation evolves, these measures may also evolve with it. However, in the larger context, we believe that safety and hygiene will continue to be among the top considerations for customers and bio-safety measures will continue, in some shape or form, in the foreseeable future,” concludes Kannan.