Vistara, a joint venture between TATA Sons and Singapore Airlines Ltd., signed a Memorandum of Understanding (MoU) with Japan Airlines (JAL) this week, to pursue commercial opportunities in the Indian market.
Speaking to The Sunday Guardian, Phee Teik Yeoh, CEO of Vistara, who has been a senior executive at Singapore Airlines, shared insights on the latest MoU and how Indian consumers will be able to benefit from it. Excerpts:
Q: As somebody who has worked in the aviation sector around the world, what are the challenges you face in the Indian market?
A: A lot of people talk about India being a challenging market, but that is just one aspect of the market. A better contemplation is to ask what opportunities can grow the Indian market and how we can channel the potential of the aviation sector. India is not an easy market, but with perseverance, things can get done. At Vistara, we have a passionate team and despite all odds, we have managed to reach 21 destinations in three years. So while the market is challenging, we should not be disillusioned and work with patience. The growth story and potential of the Indian market is well documented. The aviation industry is expected to become the third largest in the world by 2020 which is why it is an exciting time in the sector.
Q: How will the MoU signed between Japan Airlines (JAL) and Vistara help you tap the said potential in the Indian aviation industry?
A: This is very significant for us because the MoU is an affirmation that both the airlines will now actively pursue the commercial opportunities available in the Indian market. This mutual understanding between JAL and Vistara will help the two airlines pursue significant cooperation in the near future, such as codeshare, frequent flyer partnership as well as other operational arrangements, allowing them to leverage each other’s network, expertise and assets, subject to necessary approvals from authorities.
Q: What does the collaboration between JAL and Vistara mean for customers?
A: JAL and Vistara had already signed an “Inter-Airline Through Check-In” (IATCI) partnership earlier this year that helped customers avail seamless “through check-in” facility, when connecting to or from a Vistara flight in India and over 50 countries across the world on JAL’s network using a single ticket. The customers will have better access to destinations in Japan and India. Our latest Codeshare partnership, which will be in place by next year, will provide seamless connectivity for passengers of both airlines. We also plan to bring in a frequent flyer partnership and benefit our joint customers.
Q: What are Vistara’s plans to expand its fleet?
A: Vistara started operations in January 2015 and currently has a fleet of 16 aircraft. By March 2018, we intend to induct four new aircraft in our fleet. Once we have 20 aircraft in our fleet, we will be able to start international flight operations as per Indian regulations and here our MoU with JAL will play a crucial role. About the type of aircraft, flight frequency etc., we are still working out the details. Work is in progress and we are close to finalising things.
Q: For a challenging market like India, Vistara created a niche product. When do you think you will be able to make profit?
A: I cannot share the financial figures as of now. But we are on the right track. We started with five aircraft and now we will have 20. Our revenue indicators and cost indicators are growing and not in a linear fashion. Our frequent flyer programme is helping us expand our database. We expect to hit the mark soon but how soon, I will not be able to say that as of now.