 "Lot of effort to distract and divert attention: Mukund Rajan")
Vistara, the full-service airline brand promoted by Tata group and Singapore Airlines, unveiled its signature lounge at New Delhi's terminal T3 to target business travellers. In an interaction with media, Vistara's top brass, that included Mukund Govind Rajan, a director on board (and member - group executive council, brand custodian and chief ethics officer, Tata Sons), along with Chief Executive Officer Phee Teik Yeoh, and Sanjiv Kapoor, the airline's newly appointed chief strategy and commercial officer, spoke at length of the airline's future growth plans, and how divisions within the domestic airline industry is distracting the players from a larger business opportunity. Edited excerpts of the interaction compiled by Sudipto Dey
On cross-leverage possibilities with two airline brands in the group:
Mukund Rajan: We are addressing very different segments of the market. The core capabilities and competencies are focussed on addressing those segments. Vistara is meant to be a full-service carrier, while AirAsia India will always be a low-cost carrier. Therefore, their branding approach and marketing commitments are quite different. That was the reason we had different partners in both the ventures.
Mukund Rajan: Inevitably, with the kind of growth you see in the Indian market, both the operations are scaling and ramping up. Our plans (in Vistara) over the next six months is that we have four more new aircraft joining the fleet. There is already a plan to take it to 20, and thereafter more. You will see commensurate investment with growth in traffic and business.
On the Tata group being firmly in the pilot seat in both the ventures (Vistara and AirAsia India):
Mukund Rajan: One point I would like to make. There has been a lot of effort to distract and divert attention in the market for the core proposition that we are all here for - which is to service a growing market with the best capabilities that India and the world can bring together. Somewhere that is being lost sight of, and needless issues are being brought up. We are just focused on addressing the market opportunity.
On whether the fight over the 5/20 rule has distracted the sector:
Mukund Rajan: I believe there is a market opportunity that sector needs to address. I have made the point earlier that 70 per cent of our (outbound) traffic is not being carried by domestic carriers. It is the foreign carriers who are happily carrying this traffic. We are losing sight of the fact that there is a market opportunity that any Indian carrier that is serving the Indian consumer should be able to address. That 70 per cent of the traffic which the non-Indian carriers are carrying is an opportunity for all of us. Instead of fighting for that 30 per cent - what we seem to be doing - if you are enlightened you will look at the larger opportunity.
On Plan B if the 5/20 rule does not go:
Mukund Rajan: We have always said we are committed to serving the domestic market and those plans are in place.
On the significance of the business lounge:
Phee Teik Yeoh: It took us a long time to get the right space for the lounge (located on the domestic departure concourse adjacent to a boarding gate, facing the runway). It will be one-stop place for business travellers for any of their ticketing needs, to relax, work or socialise.
Sanjiv Kapoor: Differentiation through our lounge, product, in-flight service are going to be a key strategic pillar for us.
On airline's future expansion plans:
Sanjiv Kapoor: We will have 13 aircraft by October this year (from nine now), and almost double passenger capacity, flight to 18 cities (from 12 now). Our frequencies will more than double, and our aircraft utilisation will go up sharply - to 13 hours a day. We are re-configuring our cabin from April with eight business class seats, 24 premium-economy, and 126 in the economy class.
On cross-leverage possibilities with two airline brands in the group:
Mukund Rajan: We are addressing very different segments of the market. The core capabilities and competencies are focussed on addressing those segments. Vistara is meant to be a full-service carrier, while AirAsia India will always be a low-cost carrier. Therefore, their branding approach and marketing commitments are quite different. That was the reason we had different partners in both the ventures.
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On investment plans of the Tata group into the airline businesses:
Mukund Rajan: Inevitably, with the kind of growth you see in the Indian market, both the operations are scaling and ramping up. Our plans (in Vistara) over the next six months is that we have four more new aircraft joining the fleet. There is already a plan to take it to 20, and thereafter more. You will see commensurate investment with growth in traffic and business.
On the Tata group being firmly in the pilot seat in both the ventures (Vistara and AirAsia India):
Mukund Rajan: One point I would like to make. There has been a lot of effort to distract and divert attention in the market for the core proposition that we are all here for - which is to service a growing market with the best capabilities that India and the world can bring together. Somewhere that is being lost sight of, and needless issues are being brought up. We are just focused on addressing the market opportunity.
On whether the fight over the 5/20 rule has distracted the sector:
Mukund Rajan: I believe there is a market opportunity that sector needs to address. I have made the point earlier that 70 per cent of our (outbound) traffic is not being carried by domestic carriers. It is the foreign carriers who are happily carrying this traffic. We are losing sight of the fact that there is a market opportunity that any Indian carrier that is serving the Indian consumer should be able to address. That 70 per cent of the traffic which the non-Indian carriers are carrying is an opportunity for all of us. Instead of fighting for that 30 per cent - what we seem to be doing - if you are enlightened you will look at the larger opportunity.
On Plan B if the 5/20 rule does not go:
Mukund Rajan: We have always said we are committed to serving the domestic market and those plans are in place.
On the significance of the business lounge:
Phee Teik Yeoh: It took us a long time to get the right space for the lounge (located on the domestic departure concourse adjacent to a boarding gate, facing the runway). It will be one-stop place for business travellers for any of their ticketing needs, to relax, work or socialise.
Sanjiv Kapoor: Differentiation through our lounge, product, in-flight service are going to be a key strategic pillar for us.
On airline's future expansion plans:
Sanjiv Kapoor: We will have 13 aircraft by October this year (from nine now), and almost double passenger capacity, flight to 18 cities (from 12 now). Our frequencies will more than double, and our aircraft utilisation will go up sharply - to 13 hours a day. We are re-configuring our cabin from April with eight business class seats, 24 premium-economy, and 126 in the economy class.