Cost woes: Vistara eyes re-negotiating contracts, tech, says official

Full-service airline Vistara is looking at re-negotiation of contracts and technologies to optimise cost, a senior airline official said Saturday amid the aviation industry grappling with tough business conditions.

In July, Vistara announced that it would place orders for 19 Airbus and Boeing planes worth USD 3.1 billion (over Rs 21,300 crore) and induct 37 more aircraft from A320 neo family on lease. Source: DNA File

Full-service airline Vistara is looking at re-negotiation of contracts and technologies to optimise cost, a senior airline official said Saturday amid the aviation industry grappling with tough business conditions. The airline, which expects to start international operations this year, will fly its 22nd aircraft from September 5. "We are not immune to the external operating environment... We are looking at how we can maximise our revenues," Vistara CEO Leslie Thng told reporters here.
Faced with high fuel costs and intense competition, the domestic aviation sector is facing challenging times, which is also impacting the profitability of local carriers.

He noted that the airline is also looking at activities in terms of reducing expenditure. "Our larger aircraft size, including what we will be bringing in the next couple of years, will give us the avenue to re-negotiate some of the contracts we have," he said. According to him, the carrier has taken steps to re-negotiate some of the contracts and internally, technologies which can be used to make it more cost competitive as well as help improve productivity and efficiency.

About ticket prices, Leslie Thng said Vistara's fares are generally higher than those offered by low cost carriers. "Whether the gap is enough to cover the cost of the product we are offering is something we are looking at on how to improve it further

"... Pricing is really a function of demand and supply. We do have a good product and we need to have a fare that is value for money," he added. On whether the airline plans to have more economy seats, he said that is something it continues to look at "whenever we have the opportunity to do so".

In July, Vistara announced that it would place orders for 19 Airbus and Boeing planes worth USD 3.1 billion (over Rs 21,300 crore) and induct 37 more aircraft from A320 neo family on lease.

Currently, the airline -- which began operations in January 2015 -- serves 22 destinations with over 800 weekly flights.

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