Vistara to expand into international routes

Gurgaon, March 31

Vistara plans to expand its fleet size and start flying to overseas destinations within two years, the airline’s CEO said on Tuesday, ahead of an expected change in rules that could allow new carriers to operate abroad.

Vistara, a joint venture of Singapore Airlines and Tata Group, made its debut in January, pitching itself as a full-service premium alternative for passengers willing to pay more than for the budget carriers that handle two-thirds of India's travellers today.

Vistara is looking to procure an undecided number of new narrow-body and wide-body aircraft to increase domestic flights and begin flying to the Gulf and eventually to Europe and the US, CEO Phee Teik Yeoh said.

"There are lots of opportunities. Suddenly when the 5/20 rule goes away it's a new ball game," he said.

Under the existing "5/20" rule, Indian airlines must be up and running for five years or possess 20 planes before they can start flying overseas routes, a restriction the civil aviation ministry has said it is committed to scrap.

"As much as 70% of international traffic that Indians travel is westwards. This is where our focus will be," Yeoh said.

Vistara said last year it will gradually grow the size of its fleet to 20 Airbus A320 aircraft by 2019, all leased from Singapore-based BOC Aviation.

Yeoh said the size and timing of the new plane order would depend on the government revising the rules.

New rules mooted by the ministry will require airlines to earn credits operating domestic routes to entitle them to operate overseas.

Vistara will be competing with Air India and Jet Airways on international routes. Gulf carriers, including Emirates and Etihad, which part-owns Jet, have also made inroads into the market.

India is a highly competitive market for air travel. Despite double-digit annual growth in travellers, domestic competition has kept fares low and, along with high costs, left most major players struggling to make money. PTI