homeaviation NewsLeisure travel demand will take some time to pick up, says Vistara

Leisure travel demand will take some time to pick up, says Vistara

CNBC-TV18's Anu Sharma speaks with Vistara COO Vinod Kannan on various issues facing the airline and the wider industry amid the ongoing coronavirus lockdown.

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By Anu Sharma  May 29, 2020 2:04:55 PM IST (Updated)

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Leisure travel demand will take some time to pick up, says Vistara
It takes two to tango and hence both airlines and passengers will have an equal role to play in making flying safe again amid COVID-19 pandemic, Vistara Chief Commercial Officer (COO) Vinod Kannan told CNBC-TV18 in an exclusive interview.

As airlines resumed domestic flights from May 25 after being grounded for two months, Vistara had expected that the first few days of travel will be largely driven by essential travel demand. The leisure travel demand will take some time to pick up, adds Kannan.
While 2020 was expected to be a year of aggressive international expansion for Vistara, it has turned out to be a "watershed year" and a "challenging year." The severe disruption in demand and the current ban on international operations will lead to changes in the delivery schedule for Vistara's aircraft order.
The airline is aware that wearing face masks, shields, and all kinds of protective gear will be a new normal in the near future for the staff as well as for the passengers. It is even exploring an option of a more breathable PPE suit for the cabin crew, Kannan said.
Vistara is a full-service carrier and commands around 6 percent market share in the domestic aviation space. Having started Operations in 2015, it connected 36 destinations using 32 A320s, seven B737-800 NG and one B787-9 planes before the lockdown was implemented. For now, the airline is connecting 24 cities as the government has allowed only limited domestic operations for now.
CNBC-TV18's Anu Sharma speaks with Vistara COO Vinod Kannan on various issues facing the airline and the wider industry amid the ongoing coronavirus lockdown. Here is the full interview:
Q. Two months of complete shutdown. What was the biggest pain point for the airline?
Two months on the ground, especially for an airline, is challenging. I think one of the biggest issues for us was how we can keep the people together and motivated during this period of complete shutdown. Thankfully, our staff and our crew have rallied around us. We have campaigns running that we are all in this together. We are now back and hopefully, we will grow from strength to strength once again.
Q. What was the expectation when you resumed operations on May 25? What kind of demand did you see?
The conventional thinking was that over the two-month period, there are people stuck in different parts of the country who are waiting to go back so (largely the expectation was) essential travel. That was what we expected on day one or the first few days of travel.
Q. How long will it take for leisure travel demand to pick up as that will drive revenues for airlines?
Leisure and corporate travel is important, at least for a full-service carrier like us because we do provide a lot of other benefits to our customers. (The demand pick up) That depends to a large extent on how we as an aviation community manage these essential operations. As long as customers believe it is safe, there is no excuse in taking a flight from Point A to Point B. I think that would drive immense confidence in all passengers.
Secondly, it also depends on the steps taken by various governments, what are the measures imposed, for example, is there going to be a quarantine that needs leisure travel to sprinter or is there going to be institutional quarantine. I think those things will determine when people will start traveling for holiday again.
Q. What about steps at the airline especially vis-a-vis PPEs?
Yes, I definitely have to compliment my crew, especially the cabin crew who have to wear the uniform and then the protective suit on top of it. We are trying to see if we can get a more breathable suit because things were done in a hurry. Probably a better variety or a slightly more breathable option is something we are looking at in order to make sure that they feel comfortable. But, the fact remains that this is something we believe will be the norm at least for the near future so we will get to terms with it in the best way.
Q. The current guidelines mandate a 14-day home quarantine for the operating crew or a flight where a positive COVID-19 case is detected. Is the 14-day rule sustainable or too harsh for an airline?
When we started seeing cases of COVID-19 in India and we were still operating, at least within Vistara, we had certain SoPs and procedures that actually had something along similar lines. If a crew was attending to a customer who was found to be COVID-19 positive, then the crew was asked to take precautions, stay at home and take a test if needed. So I think, it is nothing new for us. At the end of the day, when we look at the schedule that we are operating now, we are looking at 30-40 percent of our entire schedule so thankfully we aren't running full capacity yet. There is that possibility where we allow the crew to rest and make sure that they are completely fit when they start flying again.
Q. 2020 was supposed to be a year of aggressive international expansion for Vistara. What does it look like now?
Like every other airline, 2020 has become, in fact for every industry, 2020 has become a watershed year, it has been a challenging year. But, I believe fundamentally there are some things that don't change — the Indian business, Indian travel community, and the Indian passenger. It is a huge market. It is a market where people value what they are paying for. Vistara as a full-service carrier has established itself as the premium airline in India. Some of the things that we offer such as loyalty program Club Vistara, our in-flight entertainment Vistara World these are very well regarded and do come into play now even though when we can't serve for example a meal on board.
If we look at international expansion, I think it is a matter of time when the governments are going to allow this. I think when that happens, our customers are now loyal followers and will make sure Vistara remains a force to be reckoned with.
Q. So even when the government does allow international operations, will you give equivalent focus to international or will it be primarily domestic?
A lot of it will be driven by which destinations and how the demand comes back. We have said publicly that we are going to focus on international in a big way. We have given our aircraft orders. We have 6 B787s joining us this year and next, we have A321s coming in as well. International will be a focus but domestic will continue to grow as well. How we plan and how we mix and match will depend on how the demand takes off.
Q. What happens to the aircraft deliveries?
We were supposed to get our second B787-9 in March but that has not happened. One of the biggest constraints is how do pilots and engineering crew fly out to inspect and take deliveries of the aircraft. That is a concern. There will be some changes in the delivery schedule. That is something that we are working on.
Q. How long will it take to see the demand levels seen before the lockdown?
To see the levels pre-lockdown, I suppose there are different literature and different market studies that show numbers between six months and three years. Fundamentally, I believe that India is a huge market, which is diverse and has an immense requirement for air travel. If you look at the market today, less than 5 percent of people actually fly on an aircraft so there is huge unlocked potential that is available. Now whether it is going to be the same for international routes that depends on what is happening in other countries. So, international will take a little longer to resume but domestically now that we have started as long as we can build this level of confidence among customers, demand will start coming.
Q. There is a thought process that may be we have to live with the virus. So do you think the demand will be able to pick up amid the prevailing pandemic or will it take a vaccine to reach the pre-COVID-19 demand levels?
All of us have been stuck at our homes but we have been with our loved ones and most people would say that man as a social animal wants to make sure he is free and wants to explore the world. So fundamentally, people do want to travel they want to move around. Yes, whether they can do it with the same ease or whether they have to do it with some more paraphernalia like masks or face shield, that will change. Fundamentally, the fact that people want to move around, does not change. So, whether there is a vaccine coming or whether we will have to live with it I think life has to go on, it is a matter of time before we all start getting back to our offices and jobs. Hopefully, that will be sometime soon. I think it is not going to be that long.
Q. How did the passengers behave on May 25? Was there fear among them or do you think they will fly again?
Right now, we are running a campaign for customers saying that we have to work together as an airline and as a customer in trying to help make flying safe again. We as an airline are taking a lot of steps and measures such as sanitising the aircraft, cleaning all the contact surfaces, providing PPEs when customers board. Those are the things which we are doing. Customers also have an equal responsibility to make sure that they don't travel if they are from a containment zone, do not turn up for your flight if you are not feeling well, making sure you wash your hands regularly. It takes two to tango. It takes us and the customer to make sure that we come out of this positively. I am glad to say that over the last two days at least, we have not seen any instances where customers do not listen to the crew or we have seen very orderly, well-mannered, polite rendering of interaction between customers and crew.
Q. How will you cater to business class passengers now that there are no meals and no priority boarding?
The proposition that Vistara has as a premium airline goes beyond the boarding sequence and the meals. Yes, those are also important for all premium and business class customers but there are different aspects of proposition that are important to business class passengers. For example, Club Vistara, our loyalty program continues. In fact, during the lockdown period, we sent out a communication to all Club Vistara members that their tier status is being maintained for another 4 months. We want them to come back and travel with us. They will continue to use their points. We are also offering Vistara World, contact-less streaming service on your phone, which will continue.

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