Exclusive Interview: Vistara CEO Vinod Kannan on pilot crisis, hiring plans, Air India merger and more
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
Vistara CEO Vinod Kannan speaks with CNBC-TV18 Managing Editor Shereen Bhan on various issues plaguing the Tata Group airline currently, particularly flight disruptions this week amid the ongoing tussle with pilots over rostering and compensation. Kannan also shared the airlines’ growth path forward and the challenges and opportunities as they proceed with integration with Air India. Here are the edited excerpts:
Vistara CEO Vinod Kannan speaks with CNBC-TV18 Managing Editor Shereen Bhan on various issues plaguing the Tata Group airline currently, particularly flight disruptions this week amid the ongoing tussle with pilots over rostering and compensation. Kannan also shared the airlines’ growth path forward and the challenges and opportunities as they proceed with integration with Air India.
Here are the edited excerpts:
What is the current level of disruption, and how much do you have to rationalise operations? You do about 300 to 350 flights every day. What is the current quantum that you are flying at?
I want to apologise to all our customers who were affected quite badly over the weekend. It’s not what Vistara is known for, and we hope that we will bounce back. We are bouncing back. To give you an idea, yes, we used to operate about 350 flights a day. We are shy of that by about 5%. We are short by about 20 flights or so every day. But these flights have been cancelled mainly to provide a little bit more buffer, and it’s not for any other reason.
Why have pilots chosen to go on sick leave en masse? How many pilots have come to management raising concerns over compensation? How much of it is related to scheduling and rostering issues? What is at the heart of this current crisis?
We have been growing pretty rapidly over the last month, and we have taken delivery of three or so additional aircraft. Every month, we come up with rosters to crew these flights, for pilots and cabin crew. We did have a roster for March as well. Unfortunately, it was quite stretched, and we did not have enough buffer or enough resilience in the network.
Throughout March, we also had a few operational disruptions. For example, we had bird strikes. We had some aircraft down for maintenance, and some ATC delays. When such things happen, it affects the roster of the pilots. Since we didn’t have enough buffer or standby we were not able to crew the flights fast enough. And then it started snowballing because we had to wait for the next set of crew to come in, and so on.
About sick leave and pilots calling in sick, towards the end of the financial year in March, sick leave for us usually goes up and that is a normal trend. We had planned for that. Maybe it was slightly higher than that. But that was not the main reason why this happened. I think on a planning level, we should have done better.
You are essentially saying that pilots going on sick leave was something that the management had already factored in but not planned as effectively as it ought to have. So this was not a mark of protest?
We should have planned better, and my team takes responsibility for this. It’s a situation that should and could have been avoided. Some pilots stepped in to cancel their leave and came in to operate some of these flights. This was something that should have been managed better. The amount of sick leave that is being mentioned in various media reports, I again have to clarify that it’s nowhere significantly higher than what usually happens during this part of the year.
What is the percentage of pilots who are unhappy with the change in compensation on account of the merger process with Air India? What is the size of the problem that we are talking about?
We have about 1,000 pilots. We believe that the majority of the pilots, as long as they fly the same number of hours as they are flying now, will be better off in the new contract. Having said that, I know that it’s not about averages. It’s not about medians. We have to talk about every pilot and every staff member matters. And therefore, we know that there are certain sets of pilots who perhaps have some apprehension and concerns, and we are aware of this. We have reached out to these pilots. I had a town hall with them as well, it’s not the first time we are doing this, we have done it before, even during the transition to the new contract, and we continue to do this. We have been hearing out their concerns, and we are working to see what we can do to make this better. So it’s an ongoing process.
Read Here | Vistara flight cancellations draw passenger ire and government questions
You are moving now from 70 hours of guaranteed pay down to 40 hours, which is what has caused some consternation with certain sections of the pilot community at Vistara. Because there have been letters by the HR department at Vistara that have gone public where essentially, you’re telling pilots that look, either you accept these contracts or there’s no recourse for you. Is that the way forward?
The communication that you are talking about was essentially to clarify that if pilots do not sign up for the new contract, they will not be transitioned into it and therefore into the merged entity. There are two broad sets of concerns that pilots have had. One is around rostering, scheduling, and how they operate their flights. And on this aspect, rostering is something that is always, quite contentious.
There are various sections of pilots with various lifestyles, there are some who have families and prefer to stay at their home base. Others are younger and prefer to travel out and be outside for much longer periods of time. And of course, we can’t have different systems for each set of pilots. We were one of the first airlines in the country to introduce an automated system where pilots could bid for what kind of lifestyle they wanted.
We are going to have another town hall where we are going to ask them what they would like to see with the rostering system and how we can improve it.
Second, the new contract is based on the average number of hours that we fly today, which is 70 to 75 hours. We believe that the majority of the pilots should be better off. But yes, there will be circumstances or situations where perhaps certain groups of pilots may have some apprehensions around this and for these pilots, we have to see what we can do to make this transition slightly easier for them. That’s something we are open to and we are discussing it with the pilots.
What do you believe has led to things getting to this point where you have two pilots’ associations—the Air India Indian Commercial Pilots’ Association and the Indian Pilots’ Guild—writing to Tata Group Chairman N Chandrasekaran, talking about systemic issues, and about pilots being treated as bonded labour in their words?
As far as Vistara is concerned, the rostering system and the rostering practices that we have had haven’t changed much over at least the last five to six years. Yes, we have been flying our pilots more than the utilisation is higher, which also means that the pilots are, to some extent, stretched a little bit more. But broadly and fundamentally, it’s a kind of similar rostering practice. Having said this, I think there is scope for us to hear more from the pilots, and for us to adjust this based on the feedback that we get from the pilots and that’s exactly what we are going to do.
You have 1,000 pilots at this point, and you have about 70 aircraft in your fleet. Is there a need to look at bringing more pilots on board?
It’s an ongoing process; we are looking to hire more pilots, and we are also looking to train more pilots who are already in the system. At the same time, while this might take a little bit of time, that’s precisely the reason why we have had to have the situation of scaling back just a little bit. Like I said before, by 5 to 7% so that we can create that buffer, not just for operational resilience but also to perhaps provide a slightly better kind of roster for the existing pilots.
When do you believe you will be able to go back to full capacity and normal operations? How long do you expect the disruptions to last?
Most of the disruptions that affected our passengers very badly over the last weekend were because the cancellations were made either on the same day or for the next day, which is never good. After all, a person turns up at the airport and is then told that the flight is cancelled. From April 3 onwards, most of the cancellations have been made at least two to three days in advance.
For now, we have made these cancellations up to April 10. Over this weekend, we hope to close the entire operation for April. There might be a curtailment in operations. But it’s something that is planned. We re-accommodate these passengers on other flights, either with us or on other airlines. And it’s not going to be a situation where passengers get a rude shock when they come to the airport.
We are now sitting down to look at the other rostering norms that should be in place for May and beyond. Once we have clarity on that sometime in the middle of next week, we will then publish the rosters for May. That might again see a curtailment because it depends on what kind of preference the pilots have and what kind of buffers we want to take. But at the end of the day, it will not be an unplanned and last-minute disruption.
What has been the quantum of flights that you’ve had to cancel altogether since the start of this crisis? And more importantly, in terms of refunds and cancellations.
It’s not just about talking to customers and apologising to them; as of today, we are sending out individual emails to each of the customers affected. It’s not just about refunds; that’s something that we will, of course, do. We are also going to provide them with compensation for passengers who were delayed for a long time. We are also going to provide them with additional vouchers which is again, a token apology from us. So all that is happening as we speak to the customers.
What has this done in terms of reputational loss, in terms of a lack of trust with your customers? And how do you build that back?
There are two elements to this one, of course: the external element, which is all our customers. And the only way I suppose that we can earn back this trust is to ensure that we get back to form quite quickly. And on that front, it’s quite heartening that over the last two days, our on-time performance has been over 80%–85%. So we are back on track, at least for the flights that we are operating.
And the second part of this is internal because, among my 6,500 staff, we’ve always had the pleasure of having an extremely good experience and providing great service to our customers. And we hope that, and we know that this disruption has kind of dented that. I’ve had discussions and town halls with each group of staff, not just pilots with various verticals. And I think the message is very consistent and clear: this was something that should not have happened. It’s unfortunate, but we are going to bounce back from this, and our staff can once again hold their heads high and service our customers.
What does it mean for Vistara as you move forward into this integration with Air India, and how complex is it going to really be on the back end? Is that adding to the current set of challenges that you’re facing? And of course, the pilots issue is directly linked to the merger because you’re changing compensation to match what Air India pilots are getting.
From a backend perspective, we are trying to see how we can align various things and how we can make the transition and integrate with Air India. The people situation, not just with pilots, but with other verticals as well as with other staff, is very clear, and we are very sure that we want to make sure that the transition is smooth for them. And that’s the process that we need to adopt. When it comes to handling the integration on top of the current challenges, I’m quite confident that we are more or less at the end of this disruption that we’ve had. We will be able to come out of this quite soon, by this weekend.
The DGCA and Civil Aviation Ministry had also asked Vistara for an explanation; have you responded to the ministry and the regulator?
We’ve been asked to provide details on cancellations on a daily basis which we are doing. We’ve also assured the ministry and the DGCA that we are taking care of the passengers and that we are following the norms of what is required in terms of cancellation compensations and penalties and so on, including for delays when you have to provide food and beverage wherever it’s possible. So all those are being followed. But at the end of the day, it’s not a pleasant situation to be in, we want to come out of it as soon as we can, which is what we’re working towards.
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