Amid reports of Vistara’s less-than-stellar first 100 days performance, Phee Teik Yeoh, CEO, Vistara, stands strong. It’s because he knows something you probably don’t. Beneath the airline’s current set of benchmark numbers (think passenger load factors and the like), simmers a strategy that Phee believes will ensure that Vistara becomes “India’s airline of choice.” Here’s what that strategy looks like. What’s Vistara doing differently from other Indian airliners to stand out of a very competitive crowd?
At Vistara, innovation is at the core of our operations and service. We’ve adopted global best practices, and hired the finest talent and trained them on our service excellence model. We are focused on approaching the market differently and this is reflected in the innovations we’ve introduced across our product and service offerings. Take for example, how we offer an auto check-in service. If customers have not self-checked-in four hours prior to scheduled departure time, we auto check them on their flight and send their boarding pass via SMS or e-mail. Our user friendly mobile app is packed with an array of features for customers to enable self-servicing. Adding to this, our loyalty program Club Vistara is a value based program where loyalty points are accrued based on actual spend on the fare, rather than miles travelled. Recently, we’ve also announced the launch of our in-flight entertainment with BAE Systems providing Vistara’s Business Class customers with customized Samsung Galaxy tablets with specially selected preloaded content. The entire fleet of Vistara will incorporate this modern IFE (in-flight entertainment) solution in the next six months enabling inflight wireless streaming of content on the PEDs (portable electronic devices) of customers in Premium Economy and Economy cabins. Besides being pioneering, this system lowers the overall weight of the aircraft compared to aircraft with incorporated back-of-the-seat entertainment. This first of its kind IFE solution is the outcome of much deliberation and is innovative, ground-breaking and novel for our customers. Then there’s our Premium Economy Class section, which offers the luxury of extra space, enhanced comfort and a lot more for a little extra. Our dining experience offers an interesting fusion of regional dishes inspired by global culinary trends. Also, to keep in line with healthy eating habits, we have lighter meal portions and we rotate our menu weekly to offer variety to our customers. How do you offset the costs of offering higher service levels to ensure profitability?
Besides operational excellence and service excellence, cost leadership is one of our top strategic imperatives. We strive to keep costs low through disciplined control of non-customer facing expenses and innovative use of technology. Additionally, we also leverage the expertise and resources of our parent brands to reduce overhead costs. Our model, which is a healthy mix of insourcing and outsourcing, helps keep our operations lean and effective. As we move forward, we will continue to look at options which will help us keep our costs under check while delivering the highest standard of services. We believe that profitability is a natural outcome if we keep focusing on consistent delivery of our services and manage cost efficiently. Is this strategy of offering higher levels of service sustainable, especially in the light of Kingfisher’s experience?
Yes it is sustainable. For us, consistently delivering a high standard of services is a given. Our strategy is determined by the unique value proposition we offer based on our brand promise of delighting our customers with intuitive thoughtfulness. Our customer centric approach helps us put the customer first in all we do and leveraging the finest attributes of the two great brands–Tata Group and Singapore Airlines–to deliver exceptional quality at every stage of the flying experience. Our obsession with quality blended with best-in-class service and innovative technologies is already acknowledged by customers and it is already raising the bar in the industry. This has given us the confidence that we will soon become India’s airline of choice. We firmly believe that we will change the mere transactional travel experience of customers to a more personal, joyous and seamless one. What role does IT play in ensuring higher levels of service?
IT plays is the lead enabler of high quality services to Vistara’s customers. It is also an absolute necessity to provide strong IT support to our business units and teams who are directly or indirectly involved in customer interface. Our IFE solution is a pioneering concept backed by state-of-art technology. The solution will be scaled up in next six months to offer in-flight Wi-Fi streaming of content on the PED’s of customers. While deploying Wi-Fi onboard would elevate the flying experience of our customers, it will require prior government approvals and infrastructure development with partners. We would definitely like to offer onboard Wi-Fi connectivity to our customers soon and help them stay connected during their travel. What is your expectation from IT in the near term?
In the initial phases of pre-launch, the initial focus from IT was to deploy the infrastructure and business solutions that would enable the smooth launch of the airline and its operations. In the near term after the launch, our IT focus is to achieve steady performance in operations, scaling up to meet the demands of setting up additional routes and executing projects both, in the technology domain and in airline business areas. These will also be aligned to our strategic imperatives of operational and service excellence and cost leadership. We will consistently deliver high-quality customer experience through innovation. How does the Indian aviation environment compare to that in other Asian countries?
The Indian Aviation sector has immense growth potential, though it is yet not a mature market compared to its Asian counterparts. If you look at the number of aircraft operated by Indian carriers, it is about 450, whereas Chinese airlines operate around 1,800 aircrafts. The seat per capita in India is far behind many countries such as Australia, China, US and Japan. Compared to other Asian countries, a very low percentage of Indians travel by air. About 60 million tickets are sold annually in India. Less than three percent of Indians fly compared to Malaysia where more than half the Malaysian population travels by air. Indonesia has 57 scheduled airlines; India has only about a handful. So the huge reservoir of potential in the Indian aviation space remains underutilized. The cost of operation in India is very high. ATF in India is far costlier than many other parts of the world, due to a slew of central and state taxes. Marketing margins of oil companies add to the price. The lack of an MRO ecosystem in India is another glaring gap. These are some of the factors that hinder the sector’s growth prospects. The aviation environment in other Asian countries is much more liberal and unobstructed. In China, the regional government strategically supports airlines, to boost connectivity and economic benefits. The government focuses on creating aviation hubs through the scientific planning of a domestic network. Of the five large airport groups, three have international hubs (Beijing in the North, Shanghai in East China, and Guangzhou in South Central) that are used to support regional hubs and economic growth in respective regions. The Civil Aviation Authority of Singapore works in partnership with the industry to anticipate and adapt to future changes in regulations, processes and technology. Singapore’s aviation sector generated about 163,000 jobs (direct, indirect and induced). Aviation facilitated the creation of an additional 484,000 jobs for the Singapore economy in 2011 through tourism, trade and investment. These are inspiring examples of how we can use global best practices to enable our industry to chart new heights. The health of the aviation sector is a direct pointer to the prosperity of the country. With supportive policies and an enabling environment, India can be well poised to achieve its vision of becoming the third-largest aviation market by 2020 and the largest by 2030. And I am glad to say that the Indian government is looking at introducing reformist policies to enable the sector. What learnings are you bringing from Singapore airlines to Vistara?
Leveraging the best traits of our parent brands, we seek to establish new standards of service and transform the discerning air traveler’s experience. Vistara incorporates the customer-centric approach and service excellence that is integral to SIA service philosophy. Perhaps one key learning is that service excellence comes from a combination of unstinting investment in rigorous training, passionate employees and leadership in IT and innovation. We have also been leveraging the aviation expertise and knowledge of Singapore Airlines.