There is less competition because the Gulf carriers or transit carriers or sixth freedom operators are not operating, says Vinod Kannan
Full service carrier Vistara has announced flights to London from August 28 to September 30 in what marks the airline’s foray into long-haul international destinations a year after it launched its first flight to a foreign destination, i.e. Singapore. It also has plans to launch flights to Frankfurt and Paris. Jagriti Chandra spoke to Vistara’s Chief Commercial Officer, Vinod Kannan, to understand why airlines are keen on adding more foreign destinations at a time there is a general slump in demand and what are the challenges staring them.Vistara has announced flight bookings for London only until September 30. What happens after that?The flight operations depend on a couple of things. Firstly, in terms of the bilateral agreement with various countries — the bubbles have been established across different lengths of time. For example, the agreement with UAE is until the end of August and, therefore, we are operating flights till the end of August to Dubai. Similarly, the tie-up with the U.K. is till the end of September.[Our schedule after September] will be guided by the decision taken by the Civil Aviation Ministry. But at this time we have made use of the opportunity to open up to the maximum extent possible.Do you have permanent airport slots at London Heathrow?We have slots until the end of the Northern Summer Schedule, or the last Saturday of October which is October 24. For Northern Winter it is a question of what decision the airport takes in terms of slot alleviation, [which is governed by] the rule of use it or lose it. If an airline doesn’t use its slots, these go back to the airport, which is free to reallocate them. In the summer, the number of airlines operated were very few and, therefore, there were several slots available which is why they have allocated these to carriers, including us. In winter, we are pursuing this with them but they have not made a decision yet. But at the same time we are in talks with various carriers and the airport on how we can procure permanent slots.Why are airlines keen on launching international flights at a time there is a general slump in demand?It is a function of a couple of factors. The first is, regardless of a general slump in demand there is still movement of essential traffic or people who are stuck in different places. This is still happening and the volume at least in India’s context is quite high because we have a large size of diaspora in different parts of the world. There are people who normally come back to visit their friends and families here, which is especially important in today’s times where people want to take care of their loved ones. But, compared to where we were at the same time last year, there is a drastic reduction in demand.[However], if you notice, we are not being as aggressive as some of the other carriers. We are conservative and we have only launched three times a week [to London] and we will see how this goes and then we will make a decision on further increase or decrease.But the bilateral agreements entered into by India also mean there is less competition for airlines launching new international destinations as these allow only point to point travel and the carriers of only the bilateral partners to connect the two countries. As a result, there are no Gulf carriers to compete against?There is a reason why the agreements have been established in this manner. Of course, from a customer’s perspective the fewer transit stops there are, or the fewer flights there are, there is risk which is reduced. I still maintain that air travel is the safest form of travel between two points but, given the current situation everyone wants to be slightly more comfortable and, therefore, wants a direct flight. So, yes, there is an opportunity for us.There is less competition, because the Gulf carriers or transit carriers or sixth freedom operators are not operating. But even if there are fewer competitors the overall demand has also reduced or shrunk. Fundamentally, it is still a positive opportunity for us which is why we are embarking on this because we believe we have the trust and confidence of our customers in India, but at the same time it is not something we believe is going to be easy going either — so we believe we will have to wait and watch.Vistara also has plans to launch flights to Paris and Frankfurt. But there are only two widebodies, Boeing 787 Dreamliners, in the fleet. So, how are you planning to expand the fleet to keep pace with your international plans?We have two 787s — the first one arrived earlier in the year, and the second one arrived on August 15. One rotation (or a return flight) to Europe effectively takes 24 hours. The maximum I can do with the two aircraft I have will be about 10 times weekly, catering some time for maintenance and down time and backups and so on. At this moment we have announced three flights, so there is opportunity and scope for us to expand little bit more to Frankfurt and Paris.But what frequency we do on various routes will depend on how we are operationally able to manage because it depends on what slots and timings we get as well as demand. While U.K. to India is a big market, the other two markets are something we are reviewing and at this point of time we are still trying to come to a conclusion on what will be the best way to serve these points from a schedule perspective.What plans for the Far East?The question is what kind of arrangement we have bilaterally and what the other governments are open to. The Ministry of Civil Aviation has said it is in talks with 13 countries to establish bilateral agreements, including Singapore, New Zealand and Japan. These are very positive developments for us. Of course, we will have to see when this gets formalised and then it gives us an opportunity at least in the short term [to lauch flights]. So, we will wait for those announcements, and at the same time, we have to play with the limited resources we have — the two widebodied aircraft, which we will have to deploy meaningfully across different points.
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