SimpliLeader — Giam Ming Toh on Vistara’s Premium Economy, Yields & Passenger Experience Enhancements
Editor’s Note: As part of our new SimpliLeader series — in which we’ll showcase some of the keenest minds in aviation — we met Vistara’s Chief Commercial Officer, Giam Ming Toh. This is the second part of that conversation, where we discuss Vistara’s Premium Economy cabin; yield management; and addition of IFE. Here’s the first part of our conversation, in case you missed it.
Edited excerpts follow after the video below:
SimpliFlying: How are you educating your passengers about Premium Economy?
Giam Ming: I must admit that we could have done more for a start. But you will see more happening in the next few days. There’s a lot happening in terms of advertising and educating the market about the product. Till now, we have gone to the agents, educating them about the product. We have gone to corporates, and given them presentations for example, but now we are reaching out to the general market, so you will see more overt advertising of our Premium Economy product and offerings.
SimpliFlying: How has the take-up been in Premium Economy so far, and do you think that has diluted your yields in business class?
Giam Ming: We believe that Premium Economy is Economy Class Plus and not Business Class minus. We think that the segments of consumers who travel business class will continue to do so. We believe there’s a big segment of the much larger economy class market that will look for extras in the areas that Premium economy offers. In terms of yield dilution, we have no historical data to refer to. I must admit that the Premium Economy pick-up was a bit slow initially but we have seen very good pick-up in the last 1-2 weeks actually. The load factors on some of the flights are very interesting. The original thinking was that Premium Economy would only see take-up once Economy class starts filling up but now we have some flights where Premium Economy is fuller than the Economy cabin. People are actually buying that product by itself. As for diluting yields, our data suggests otherwise. I think it has been a very good initial few weeks.
SimpliFlying: How do you intend to make Premium Economy work in India given that most of the sectors you are operating in, or will be operating in, are quite short sectors? It is generally harder to differentiate your product in short sectors, as compared to medium haul or long haul.
Giam Ming: I think you hit the nail on the head. It is always harder to differentiate on a short sector. If you know how we came about the idea of Premium Economy, we took interesting insights from the experience of most of the management team, and two rounds of consumer research, before we pinned down on positioning and the product. As I said, in every market there will be richer customers. There will be people who just want basic transportation and are prepared to put up with a very crammed seat where you can’t even open your laptop. There will be other people who are prepared to pay a bit more. And at the other extreme, where people will pay three to four times for a business class seat. We think the gap between the existing business class before we came along, and majority of the economy class market — which is a low-cost market — is very wide in terms of product positioning and service offering. While we think there is room for both these ends of the market, we feel we can bridge this gap with something in-between.
SimpliFlying: What enhancements are you planning for overall passenger experience at Vistara?
Giam Ming: While we started with a fairly high level of service, enhancements will be an on-going thing for us. We are getting lots of unsolicited feedback from customers, very well-meaning and mostly positive. One example is cutlery in premium economy, where the intention was always to have metal cutlery but we had to start with plastic due to some supply issues. From 1st February, we switched completely to metal cutlery in premium economy. Even in economy class, we are planning to switch to bio-degradable and better quality cutlery from 1st April, 2015. There are a host of other enhancements that are underway. I know some are starting 1st March, while some are starting 1st April, 2015, particularly in premium economy. There will also be an imminent announcement on In-Flight Entertainment, within the next 1-2 weeks. We are very excited by it because it is something new, something which is not offered in India at the moment. In the long term, we feel it can lead to a lot more possibilities.
SimpliFlying’s Take on Vistara IFE (In-Flight Entertainment):
Although Giam Ming hasn’t mentioned it explicitly, but we believe Vistara will be the first airline in India to offer wireless IFE to its passengers. Their existing fleet has no seat-back screens and we definitely don’t see them going that route. We would assume that the front part of the cabin may get a handheld device to stream entertainment, whereas other passengers may be able to do so on their own tablets or smartphones. A possible drawback for this arrangement can be absence of in-seat power across Vistara’s fleet, which may discourage passengers to use their own devices. We also believe that Vistara may explore in-flight Wi-Fi in the future, once regulatory clarity over the the same is achieved.