Vistara has been following strategy of measured growth, says CEO Leslie Thng

Leslie Thng, who was brought onboard by Tata Sons-Singapore Airlines joint venture Vistara as chief executive officer in October last year, has been mandated to strengthen the carrier's domestic operations and take it international. In an interview with Shahkar Abidi, the former CEO of Singapore-based SilkAir talks about the airline's future plans, including the expansion of its fleet, introduction of 'Lite' fares and Regional Connectivity Scheme (RCS).

What are Vistara's short term and medium term plans?

We have always wanted to become a global airline, which means we will go international, but at the same time, the domestic market remains very important and a key asset. We aim to start our international operations, subject to necessary approvals, before the end of this year, with destinations within the range of our Airbus A320neo aircraft. As we induct more aircraft in our fleet from the Airbus A320/A321neo family starting next year, we will densify our domestic network and expand on other international routes. Our wide-body aircraft, which we recently ordered, are scheduled for delivery between 2020 and 2021, during which time we plan to further expand our international operations on medium and long-haul routes.

Why is Vistara's aircraft order conservative in comparison to its peers?

I wouldn't call a commitment of 56 aircraft, including those on lease, which are scheduled to be delivered in a period of five years, conservative. In fact, it reflects a very strong growth ambition. Our approach to business from day one has been to achieve measured growth and our aircraft order is aligned with a thought-through expansion roadmap.

Vistara introducing Lite fares looks attractive, but doesn't it come with the risk of diluting the USP of being a premium full-service carrier? Do you think India is not the market for the kind of airline Vistara previously envisaged?

Not at all. On the contrary, our new pricing model, Vistara Freedom Fares, simplifies flying for travellers. We believe it can be a game-changer in the industry. It is a novel concept that the biggest and the best airlines all around the world have adopted in response to customer needs. Ours, obviously, is unique and tailored for Indian travellers. Eventually, we're only giving options to our customers, empowering them to pay for what they value. We spent months exploring multiple possibilities and in understanding what works best for the new-age travellers, who have varied preferences. Lite fares address those customers who simply want the lowest fares and no other frills, and this is a segment that we had perhaps not appropriately addressed hitherto. And Freedom Fares is not just about Lite fares, which is just one of the fare types. Our Standard and Flexi fares offer lower and free changes/cancellation fees, respectively, and both come at very affordable add-on price. As a full-service carrier, our USP is that we are a customer-centric brand, committed to redefining air travel in India with innovative propositions and excellent service delivery. Our new customer-empowering pricing model only reiterates our USP and what we stand for.

Do you have any plans concerning the Regional Connectivity Scheme (RCS)?

We support the government's UDAN (Ude Desh Ka Aam Nagrik) scheme, which will significantly contribute to the country's economic growth. However, due to our relatively small scale and size at present and absence of suitable aircraft to operate on routes under the scheme, we could not participate in it. But we do not rule out the possibility of doing so in the future.

With some airlines saying that current fares are unsustainable, do you see industry adjusting its capacity to raise the fares in coming months?

Pricing is a function of supply and demand in the market. At Vistara, we price competitively and offer value-for-money products and fine experience at every touch point. Our capacity addition has been moderate and we have been following a strategy of measured growth.

What's your outlook on rising crude prices and congestion at major airports?

Fuel prices are a cause of concern for airlines around the world. That, coupled with a depreciating rupee, state taxes on aviation turbine fuel, parking charges and other high costs truly make business challenging for airlines in India. Airport infrastructure challenges such as runway shortage, slot constraints, capacity constraints, etc, are in great need of attention, too. Almost all metro cities need two airports to handle the growing demand for air travel and smaller cities need significant improvement of existing airports. This is, perhaps, the biggest issue that impedes the growth of the Indian aviation ecosystem today, limiting possibilities for airlines and eventually all related businesses. However, we're confident that there is an increased impetus on the infrastructure development by the government that is also taking a consultative approach to changes for the benefit of the entire ecosystem. The vision of enabling a billion passenger trips in a year is especially heartening and makes us quite hopeful.