Vistara says first overseas routes will include South Asia

MUMBAI (Reuters) - Indian airline Vistara will feature South Asian nations among its first international destinations, a senior executive said on Wednesday, as it devises its strategy after the government eased restrictions on flights abroad last month.

Vistara, a venture of the Tata group and Singapore Airlines Ltd, is "reviewing and refining" its plan for overseas routes and will decide on aircraft orders afterwards, Chief Strategy and Commercial Officer Sanjiv Kapoor said at an event.

"The first set of routes that we will launch internationally will be the routes that can be flown by our existing aircraft, the A320s, which will be routes within three, three-and-a-half hours of India," Kapoor said, referring to narrow-body aeroplanes built by Airbus Group SE.

"Regional routes and SAARC, essentially," he said, referring to member countries of the South Asian Association for Regional Cooperation.

Under new rules, domestic airlines can fly overseas as long as they deploy 20 aircraft or 20 percent of capacity in India, whichever is higher. Airlines previously had to wait five years before they were permitted to fly international routes.

Vistara and AirAsia India - a budget carrier also owned by Tata and Malaysia's AirAsia Bhd - are speeding up fleet expansion so they can fly overseas sooner and compete with local rivals such as Jet Airways (India) Ltd and state-owned Air India Ltd which already fly internationally.

Vistara has leased 11 A320s and will add two more this year. It originally targeted 20 planes by June 2018 but a person familiar with the company's plan said last month the carrier would seek more.

The airline may also consider wide-body aircraft, the person said.

Low-cost carriers (LCCs) in India such as SpiceJet Ltd and InterGlobe Aviation Ltd's IndiGo also fly overseas but mainly on short-haul routes.

"LCCs thus far have not been able to really make the business model work on long-haul international routes. And that is the segment that we are very keen on, along with medium- and short-haul international," said Vistara's Kapoor.

(Reporting by Devidutta Tripathy; Writing by Aditi Shah; Editing by Christopher Cushing)