It was the result of over a year of customer research and meticulous planning, under the code name “Project Purple” that started when fuel prices were still low, writes Sanjiv Kapoor.
Two days ago, Vistara surprised industry observers when it announced its “Freedom Fares” — fares that include an “Economy Lite” fare that does not include a complimentary meal. The name "Freedom Fares" refers to customers having the freedom to choose the kind of fare and attributes that suit them best. It was the result of over a year of customer research and meticulous planning, under the code name “Project Purple” that started when fuel prices were still low.
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The fares certainly got a reaction. The immediate reaction was bipolar — people either loved the idea and said this would be a game changer, or they hated it and said we had lost the plot. Several people did not mince words in stating this, tagging our parent companies Tata Sons and Singapore Airlines on social media.
I spent a good part of the past two days personally responding to messages on social media, countering misconceptions and explaining why we felt that what we were doing was empowering customers and not hurting them. And telling people to just wait for the fares to launch, they’d be pleasantly surprised.
One Twitter exchange summed up the extreme reactions: Rishi Seth (@sethrishi) tweeted, “As any student of strategy or of
Within minutes, Ellis Taylor (@Flightglobal_ET) responded “… except that is seems to be working for carriers like Delta, American, Air NZ, British Airways…. I could go on. As Mr Porter might call it,
NK (@NaraayanKannan) added “I think @airvistara has targeted a new segment very smartly”.
So, which is it? Have we lost the plot and sold our soul? Or are we doing something that makes good business sense and benefits customers?
As one of the champions behind this idea, I am of course convinced that it will turn out to be a huge winner for all stakeholders, and here is why:
So, there you have it. With Freedom Fares, we are turning the pricing model on its head and making more features and benefits available to customers than ever before, at very attractive and affordable fare differentials. What is in it for us? Well, in addition to more efficient customer segmentation, it allows us to sell fares — or attract customers to buy fares — that are more than just the lowest available fare. While this may seem like a minor point, it is a huge win-win for both customers and us. We increase our revenues while giving customers more choice, greater benefits, and enhanced peace of mind.
And we align our costs to what is valued by different customer segments. At the end of the day, we are evolving to meet the changing needs of air travelers in India. We are taking best practices from around the world and adapting them for India. We are trying to create a basis for customer choice other than just price competition. And we are trying to support the government’s desire for a more customer-friendly pricing regime where we address the No. 1 pain point of customers, which is high change and cancel fees, in a practical manner.
Along with Freedom Fares, we are also introducing our free streaming on-board audio and video entertainment called “Vistara World” as we continue to invest in delivering the best customer experience for air travelers in India. And what if a Lite customer gets a bit peckish while watching the excellent free entertainment on Vistara World while admiring the soft mood lighting on our Airbus A320 Neos? They can always buy an item from our on-board menu called “Café Aubergine”, and pay with a simple swipe of their card and be handed an itemized printed receipt with GST details by our amazing award-winning cabin crew. Life is good when you fly Vistara!
Sanjiv Kapoor is chief strategy and commercial officer at Vistara.
Vistara is one of the launch partners of CNBC-TV18.com.
First Published: IST