For Vistara, Sky Is Not the Limit

Innovation is our cultural pillar and it played a key role in the way we have come out of the pandemic: Vinod Kannan, CEO of Vistara

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Is flying a feeling for you? Then you must have missed it dearly during the pandemic. Both domestic and international operations suffered as the aviation industry was severely hit by the first and second wave of COVID-19. Now, the industry is looking at heydays again with demand going back to pre-pandemic levels.

Vistara Airline, the country's full-service carrier, is optimistic about the future. "Both domestic and international operations are looking good. There is almost a 15 to 20 per cent rise in demand in terms of its passenger numbers because of the new routes and capacities we have created. We have moved to the pre COVID-19 capacity, from October last year demand has been coming back and from mid-February things are looking very positive," said Vinod Kannan, CEO of Vistara.

Vistara is a joint venture of Tata Sons Pvt. Ltd and Singapore Airlines Ltd (SIA), wherein Tata Sons holds 51 per cent stake and Singapore Airlines owns 49 per cent stake.

Like all other sectors, Vistara's expansion plans were affected by the pandemic. The airline had to delay its plan to add 60-plus aircraft by the end of this year. However, the company is still hopeful, "We have not canceled any aircraft, there has only been a slow down. The initial plans of adding 60-plus aircraft has now been reduced to 50-plus. There have been some production issues with Airbus and Boeing aircraft, however, as we are on track now, we can see recovery and continue with our expansion plans."

The airline recently introduced new routes such as Delhi to Coimbatore, Mumbai to Coimbatore and Bengaluru to Coimbatore. "We will add more such routes and continue with expansion."

Making use of every opportunity, Vistatra never stops innovating. It introduced new technologies such as digital self help, blocking an extra empty seat, bubble arrangements and other digital facilities. They also introduced an insurance policy which has turned out to be one of its most successful models. "Insurance is very topical, more and more people are subscribing to it. We also introduced services such as gift cards, gift tickets, these helped us move the business forward. Innovation is our key cultural pillar and the way we have come out of the pandemic with agility and thinking on the feet, innovation is at the core of it."

Talking about the innovation around high fuel costs, Kannan said, "For most airlines, fuel prices consist of 30 to 35 per cent of the expenditure. We cannot cut the cost there, however, we use fuel optimization techniques which reduce fuel burn and we are one of the first players in this."

Among its other important revenue streams, cargo is at the top. "Cargo is an important revenue stream, be it cargo charters or passenger charters, we have flown to areas we have otherwise never flown before."

The challenges of a full-service carrier are plenty. In India, the domestic traffic is mostly dominated by low-cost carriers and this has a repercussion as people expect a certain price level. Additionally, the taxation on fuel in India is high which leads to higher prices for full cost carriers. Vistara is famous for its premium economy, a product that the airline spotted in its early yeras, "The price for premium economy is higher but it adds value. Premium economy got a lot of attention during COVID-19, as people were looking for social distancing and comfort. Subscription to premium economy has increased 5 to10 per cent approximately."