Vistara will reduce premium seats; sells economy seats better: Phee Teik Yeoh

Interview with Chief Executive, Vistara

Vistara, a joint venture between Tata Sons and Singapore Airlines, recently completed one year of operations in India. After a slow start, its occupancy rate is gradually going up. Vistara’s Chief Executive Phee Teik Yeoh tells Arindam Majumder that the airline will soon have a load factor higher than the sectoral average. Edited excerpts:

How has Vistara managed to maintain 90 per cent on-time performance over the quarters?

Despite a small fleet size, we achieved on-time performance of 90 per cent. I will attribute this to planning, people and process. Backed by Singapore Airlines’ rigorous training, we spend a lot of time planning how to make operations on time. When disruptions happen, we have a well laid-out plan to bring operations back on time. We have the best people in the industry.

How will the decision on the 5/20 rule affect Vistara?

Our growth is independent of the 5/20 rule. We aim to grow our footprint domestically.

Considering your economy-class seats have fared well, will you reduce the number of business-class seats?

There will be a cabin reconfiguration. We have learnt over the past one year of operation that business-class seats did not take off the way we expected. Because of the route dispersal guidelines, we have to fly some non-profitable routes. We will reduce the premium-category seats. We have shown we can sell economy-class seats better than other airlines. Very soon, our load factor in economy class will exceed the market average.

After a slow start, Vistara’s load factor is gradually improving. For December, it has been a record high. What changed?

When we started in January 2015, our load factor was a good 40 per cent behind the bigger airlines. Now, the gap is only 10 per cent. Also, it is unfair to compare our load factor to other economy airlines, because Vistara has more business-class seats. A fair comparison would be with our economy-class seats. There, we are only five per cent behind them.

How has Vistara taken advantage of the low fuel cost?

We will plough back our savings in improving the customer benefit. We are going to open passengers’ lounge at airports in February. Vistara will introduce onboard wireless entertainment for domestic travellers. This will further differentiate us from other airlines.

What are your hiring plans?

Right now, we are close to 900. With new aircraft, we have to increase our team. Only the operational team is going to grow according to requirement.