Vistara CEO, Leslie Thng, tells Tony Concil how anticipating customer requirements is vital for domestic success in India
Passenger numbers alone will not guarantee success for airlines in the booming Indian air travel market, says Vistara CEO Leslie Thng. Carriers will still have to continue working hard to meet the needs of changing customer requirements.
How would you describe the Vistara business model?
Vistara started in January 2015 and we have been a full-service carrier focused on high-quality customer service in the Indian market from day one. As we expand domestically and even start international flights, high service standards will continue to be at the core of our business.We have committed to new aircraft orders. The Airbus A320neos will boost our domestic network. We will address feedback from customers for more frequency on key routes.
And we will feed soon-to-be-launched international services for which we ordered Airbus A321neos and Boeing 787-900s. These will serve medium and long-haul routes to Southeast Asia, East Asia and the Pacific initially.
We will look for partners in these regions to help us when we expand. The obvious choice in Southeast Asia is Singapore Airlines—one of our shareholders—but we need partners elsewhere too. Having said that, Vistara is a standalone carrier and we will act as an independent airline.
It is not necessary to be associated with an alliance at the moment. We are still a new airline and when we expand we don’t want to be restricted in our choice of partners.
How do you keep your costs down in the Indian market?
India is a very competitive market, which makes life difficult for a full-service carrier. We have a quite different cost structure from a low-cost carrier. The service philosophy we have translates to higher cost, so it is important we are cost competitive for our business model.
On the one hand, we expect that unit costs will decrease as we scale-up our operations. On the other hand, we are establishing a loyal base of customers that value our product and do not mind paying a premium. We think we have a good value-for-money proposition.
We continually work on trimming our non-customer facing expenses and keeping our cost structure leaner. That is where we are today. The Indian customer appreciates what we are trying to do.
It is not necessary to be associated with an alliance at the moment. We are still a new airline and when we expand we don’t want to be restricted in our choice of partners
What must change for aviation to be sustainable in India?
India is full of opportunities for aviation. It is a big country and only a small percentage travel by air today. Demand is not an issue. But doing business in India is tough. It is not one factor that will make an airline profitable and sustainable. It is a combination of many things.
I think that the government is coming to understand the challenges aviation is facing and their role in supporting the growth of connectivity that is so important to economic development. The government has been proactive and is looking at how to refine rules to support sustainable aviation growth.
One of the key issues is availability of infrastructure. The government is seriously looking at that and what is required to make the supply side work, even collaborating with private partners. There are plans to build secondary airports in many cities, for example.
Another is costs. And the cost of doing business is made higher by tax obligations. The government is looking at this. But it is a complex issue that needs the cooperation of different levels of government to address high taxes on jet fuel, for example.
And, of course, the airlines have a role. Airlines must understand what customers want and design products that respond to these needs. There are always things that we can do better. We want to be more responsive, more spontaneous, and more efficient in the internal processes that deliver our products.
Does it worry you that the government is preparing for 1 billion travelers in 20 years’ time when the industry predicts just over half of that?
IATA’s prediction is for 572 million passengers in 2037. Well below what the government expects. What that shows is that everyone is optimistic about Indian aviation.
The government has a sense of what is needed, and their forecast is not impossible. The economy is growing and the population is growing. That will translate into a lot of travel. And if sufficient infrastructure is there, travelers will come. Only 5% of the population travel at the moment in India. Imagine if that becomes 10% or 15%. Indian travel has already come a long way from a small base. There is still an enormous potential waiting to be harnessed.
Will the inclusion of private partners put the cost of infrastructure up?
India can be a hub if it has the right infrastructure. That means new airports, which requires lots of investment. And it must be of a good standard. So, private involvement is necessary.
But it is important for the government, airports, and airlines to have regular dialogue about the cost of an airport. Airlines must be able to generate positive returns just like the government and airports. There must be a sustainable model when it comes to airport development. We need infrastructure that all stakeholders find efficient and effective.
Only 5% of the population travel at the moment in India. Imagine if that becomes 10% or 15%. Indian travel has already come a long way from a small base. There is still an enormous potential waiting to be harnessed
Is the cultural diversity in Vistara management a strength?
India is very diverse in itself. It is full of different cultures and religions. At Vistara, we welcome this diversity. But the key is to be a team regardless of our individual backgrounds. Whether someone is from Singapore, like me, or from India, the important thing to note is that we all have our expertise. That is where the strength of Vistara comes from.
That goes right up to the CEO. I am a Singaporean leading an Indian airline. It is nothing new to have colleagues from different backgrounds in aviation. Nor is it new to have colleagues from different generations and of a different gender.
It is the culture of Vistara that is important. There is strength in diversity.
If you could change one thing tomorrow, what would it be and why?
Changing one thing would not give you an advantage for long in this industry. What I would wish for is the ability to anticipate better. It would be like having a magic wand.
We do lots of research to try to anticipate trends. Vistara is here for the long run so it is important to understand what the future may look like. That is critical for investment purposes. Always be aware of short-term situations but plan for the long term.
Vistara won’t be a global airline overnight.
We plan five years ahead in terms of aircraft orders and so forth, but we look further than that when we think about what the customer of the future might want.
How would your staff describe you?
I think they see me as person who is very focused on making sure that our strategy is aligned with what it takes to be successful. And the role of the CEO is to articulate that in a vision that is understandable to all. I think they understand that I believe in my team and trust them to excel in their job. Finally, I know I must be patient. In aviation and in India particularly, it is not always easy to get the job done.
In brief… Leslie Thng
Levels of versatility
Thng served as Chief Commercial Officer of Budget Aviation Holdings, an SIA holding company, before joining Vistara in 2017 as CEO
He holds a bachelor degree in business administration from the National University of Singapore
Beginning his career at SIA in 1999, Thng has held a number of different senior roles at SIA before joining Vistara