Vistara aimed at filling a void in India's flying experience: CEO Phee Teik Yeoh

Promoted by Tata Sons and Singapore Airlines, Vistara became the third full-service airline in the Indian aviation market when it launched operations in early January (the other two are Jet Airways and Air India). The airline is trying to do new things to differentiate in a segment that is dominated by well-entrenched players such as Jet Airways and Air India. In an interview with Business Today's Manu Kaushik, Phee Teik Yeoh, CEO of Vistara, discusses his plans for the airline.

Q: In a market that favours low-cost carriers, why did Vistara choose to operate in the premium segment?

A: Right from the start, it was clear that we are going to be a full-service carrier. It is driven by the realisation that the market is yet to experience a truly fully-service flying experience. There was a void waiting to be filled. Other than free meals on board, there was hardly any difference between FSCs (full service carriers) and LCCs (low cost carriers). Singapore Airlines is known for service excellence.

We can choose to perpetuate on historical statistics. Ever wondered why the proportion of business traffic is so low? Many business travellers are forced to travel in economy because there is lack of choice and offerings. That distorts the true potential of this market. The aviation market is at the cusp of change. When you drive the car forward, you don't look at the rear-view mirror.

Q: What potential do you see in the Indian aviation market?

A: The aviation industry is highly competitive. India stands out from many markets in the world in terms of growth potential. Show me markets where the traffic has grown by more than 10 per cent on a monthly basis. Even before we came into the market, we did an extensive survey to determine the void in the market.

Q: Managing costs is an important aspect of running a successful airline. What steps have you taken to control costs?

A: We have gone ahead to outsource some of our services - airport handling, engineering maintenance and IT. It allowed us to launch the airline promptly. We keep the manpower lean. We decided how many people we can sustain in the long term. We also leverage on our parents in harnessing their ecosystem. We leveraged on Singapore Airlines' (SIA) expertise to strike out very competitive contracts in areas of engineering maintenance and aircraft leasing.

Q: What was your reaction when you were asked to start Vistara?

A: It was a godsend [opportunity]. Not many people were given this opportunity to lead an airline, let alone to set up one from scratch. I reckon the reason I was considered is because of my diverse background. In my 22 years at SIA, I have had many postings such as planning, sales and distribution, call centre and IT. India is the fourth country where I am working.

Q: Do you see yourself competing with AirAsia India, which is promoted by your parent company Tata Sons?

A: AirAsia is in the low-cost play and we are in full-service play. The market is big enough. We are in two different market segments. They are in the south, we are in the north. Even in the economy class, the market is so big, and there are different profiles of economy class passengers [in the country].