Tuesday, July 07, 2020

Vistara operating with 25-30% capacity, sees quarantine rules as key factor in travel demand

Airlines will deploy capacity largely on the basis of demand scenario for air travel on a route and quarantine rules of different states and countries, Vistara’s Chief Commercial Officer Vinod Kannan told reporters in a virtual presser.

The full service airline, currently operating at 25-30 percent capacity or 35-50 daily flights, aims to gradually reach its pre-COVID capacity in a graded manner and while new aircraft deliveries are uncertain, the fleet size will not go below 41 planes, Kannan said, adding that the COVID-19 situation will be the key factor in deciding travel demand.

The demand on most of the routes remains uneven with one way witnessing high traction and return journey (generally to a city with high COVID-19 prevalence) seeing low traffic.

Typically a full-service carrier will charge higher than a low-cost airline but the current cap on Air fares and capacity has led to similar fare levels for Vistara and its LCC competitors.

Keeping this in mind, Vistara is aware that there will be issues in the near term but is hoping that the brand value of the airline will continue to attract "value seekers."

As domestic flights resumed on May 25, Vistara and other airlines have largely been witnessing only essential travel but Kannan hopes that business travel demand will pick up at some point.

In fact, a recent survey of 5,000 passengers by Vistara showed that, for business travel, 68 percent of the respondents indicated that they are either likely to maintain the frequency of their travel as the previous year or take more flights, while 32 percent said that they may reduce.

In a scenario where the government has allowed airlines to operate with 45 percent capacity but airlines still struggling to keep up with that capacity levels due to low demand and restrictions imposed by states, Vistara is ready to explore more revenue streams.
07/07/20 Anu Sharma/CNBC TV18
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