India July 12(IM): Vistara chief executive officer Leslie Thng comments on the airlines growth plans and its intention to start flying on overseas routes by the end of this year. Edited excerpts:
How will your next phase of growth pan out?
The next phase of growth of Vistara is categorized into different buckets. One is domestic and regional/short-haul international routes, which will be served by the Airbus fleet of aircraft. This will help Vistara expand both within and outside India and on all routes that this aircraft could support us on. For medium to long-haul destinations, we decided that Boeing 787-900 (Dreamliner) would be the best for us and would allow us to start medium-haul operations from 2020.
When do you start international operations?
We hope to fly international by the second half of the year, by December 2018. We are in the process of seeking necessary permissions from relevant authorities. Our international operations will start off with short-haul international routes, within the capabilities of our A320 fleet.
In the past few months, airlines have seen an increase in operating costs due to hike in fuel price and fall of rupee against the dollar.
The fuel price has risen significantly and the rupee has depreciated by about 5% in recent months, leading to an increase in operating costs. Internally, we are looking at ways to increase revenue and at the same time be more cost-competitive. We do engage in fuel hedging, so that helps to mitigate some of the increase in costs.
What are the expansion plans for your domestic network like?
Expanding our domestic network will be key for our international success. If you look at the number of narrow-body aircraft we are bringing in, you will realize that we have an intention to expand our domestic footprint. In the last couple of months, we have started more frequency out of Delhi. We have started increasing flights from Bengaluru and Chennai. We will continue to do this. Eventually, when we start international operations, Delhi will continue to be our main hub. We aspire to improve our domestic network to provide seamless connectivity for passengers to Delhi, and to their respective international destinations from there. We are looking at other opportunities and business cases to set up a secondary hub outside Delhi.
Which are the international destinations Vistara will start its operations with?
It will still be regional and South-East Asian destinations. Our A320 fleet has a range limitationwhich are destinations three to five hours away. Once we induct Boeing 787, it will give us a lot more opportunities to carry out expansion.
Are you looking at code-share partnerships and more collaboration with Singapore Airlines?
We will be looking at code-share with like-minded partners once we start our international operations. Singapore Airlines being a very strong player in South-East Asia will be a natural partner for us when we fly there. We would have to look for like-minded partners in Europe and North Asia.
Is there enough room for one more airline in India with international operations?
Competition will always be there and we will have to embrace the competition. But, we believe that the market is growing and we should be able to have a decent market share. This is not a saturated market but one whose demand will only increase.
Was the P&W engine issue the reason behind the airlines preference for CFM engine for its Airbus aircraft orders?
All A320neo planes currently on Vistaras fleet are powered by CFM engines. We look at operating cost and commercial proposals while choosing the engine. For the Airbus orders, we decided that CFM would be the preferred engine supplier for the next phase of growth.