Mumbai: Vistara, a joint venture airline between Tata Sons and Singapore Airlines, will start its international flights during the second half of the year. The full service airline, which is currently in talks with several major global airlines for code share, will also decide on the type of aircraft it will purchase in the next three months, the airline’s chief strategy and chief commercial officer Sanjiv Kapoor said in an interview. Edited excerpts:
How are you preparing for the launch of your international operations? What are the routes are you looking at?
Technically, we are eligible to start our international operations when we get our 21st aircraft, which will be delivered in May. We are preparing the paper work but will file application once we get the (21st) aircraft. Initially, we will look at destinations that are under four hours since we operate Airbus 320 fleet. We are also looking at destinations that are in four to six hours range, and five to nine hours range and beyond. We hope to start operating flights up to eight to nine hours, by the end of next year.
What are the aircraft best suited for your international operations?
Our current fleet can service international destinations that are in three to four hours range. We will need a little bigger aircraft for our flights that are in four to six hours range, which are likely to be narrow bodied planes. We will use wide-bodied aircraft for destinations that are six to 10 hours away to Far East and Europe. Operations beyond 10 hours will require wide-bodied aircraft with longer range.
Have you zeroed down on aircraft?
All offerings from Boeing and Airbus are under consideration. We expect to make a decision in the next three months. We hope to start operating medium haul, flights up to eight to nine hours, by the end of next year. For this to happen, we need to order aircraft 18 months in advance. The number of aircraft will depend on several factors like—organisation’s ability to handle growth, staffing, availability of pilots, availability of slots and market growth.
Will you be going for a single fleet or a mixed fleet?
We are looking at solutions that result in the lowest total cost. This could be a combination of aircraft or single fleet. Airlines around the world fly twin fleet. It all depends on the mission requirement of airline.
Will you be looking at Singapore as an hub for your international operations?
Vistara was set up to create a world class global Indian airline. However, we are not going to be a feeder airline. So, while Singapore will feature in the list (of our international operations) as it is a popular destination from India, the other (international) destinations will be the ones that will make (business) sense for the airline.
We are actively in advanced stages of discussions for code share with some major international carriers across international alliances, with whom we share mutual interests. We are looking at a network that is not Singapore-related but global. We will eventually want to fly to long haul destinations in the US and Europe.
When are you expected to fly to the US?
The US is a difficult market economically due to the distance. The economics of long haul aviation is that the unit costs go down with range but after a certain point, it starts rising again, so yields will have to be justified. However, there is a lot of demand between India and the US, most of it is for non-stop flights.
Do you plan to have more presence in metro cities?
We have managed to connect Delhi to most important cities and towns of India. Ideally, we would love to have more presence in Mumbai, Bangalore, Hyderabad and Chennai. However, there are few slots available at these airports but you can’t do much with them.
There are three ways for slot constraints to be resolved. One is by building new capacity at existing airports. Another is taking slots of airlines that go out of business, and an inorganic option is through mergers and acquisitions. We are hoping that while new airports are being built, runways of existing ones are upgraded or increased. This is an existing opportunity which will help in increasing our (flight) movements per hour. The management is focused on organic opportunities to grow while inorganic growth is something, depending when opportunities come up, is taken up at the board and promoter level.
Are current oil prices tolerable and fares realistic?
Oil price currently is tolerable especially if we compare it with historic levels. However, this price shouldn’t go any higher (or would hurt airlines). At present, fares are realistic in the market. Airlines have realized that oil prices have gone up and extreme discounting, seen about two years ago, is not feasible. We are now in a more reasonable phase of pricing that hasn’t hurt or killed demand and growth, which is still quite strong.