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Vistara awaits clarity on 5/20 rule to firm up its procurement plans

by June 9, 2016 General

Vistara will firm up its aircraft procurement plans only after knowing the outcome on 5/20 norm, the private airline’s CEO Phee Teik Yeoh on Thursday said.

Under 5/20 rule, only local carriers having at least five years of operational experience and a minimum of 20 aircraft are allowed to fly overseas.

The airline — a joint venture between Tatas and Singapore Airlines — which began operations in January 2015 currently has a fleet of 11 aircraft.

“Plan will be clear after outcome of the 5/20 rule … Till then, we have to wait as it (the outcome) will help us clear many factors on procurement,” Yeoh said here, a day before the commencement of Vistara’s Kolkata-Delhi flight.

In the draft civil aviation policy, the government has proposed three options, including scrapping of the 5/20 norm, and a final decision is yet to be arrived at.

Vistara is among the new generation carriers that are vocal in demanding abolition of the 5/20 rule.

According to him, the airline plans to have another two aircraft by October and expects to be 20 aircraft-strong fleet by 2018.

“New seating arrangement is complete in six aircrafts and in another five it would be done by July … We will retain business class and premium economy class. The number of seats may change but it will continue. Premium economy is the differntiator from other airlines,” Yeoh said.

Recently, Vistara realigned its seats business and premium economy classes. Besides, the airline increased the number of seats in the economy category.

Vistara is the only local carrier that offers premium economy class.

When asked about the company’s financials, Yeoh said, “our margins have improved”.

Currently, the airline connects 17 domestic destinations with 457 flights a week and the load factor is around 80%. In the next few months, Vistara plans to connect more destinations from Kolkata.