Unplugged: The Interview-Vinod Kannan

Vinod Kannan , CEO, Vistara : The Man in The Middle of It All 

‘Everyone is worried about the wedding, should be worried about the marriage’

(On Vistara and Air India merger)

BY Manisha Singhal

Defiant with a triumphant smile, sleeves rolled up too – all at the same time. Vinod Kannan, CEO, Vistara, is not exactly spoilt for choice. On one end awards and milestones that Vistara is bagging are celebrated, on the other, a niche and loved brand of eight years is being prepped for a merger with Air India. The government owned airline that Tatas acquired last year is receiving more brickbats than bouquets from the fliers as it revamps. Tatas and Singapore Airlines are common shareholders. B

“Netflix is merging with Doordarshan (public service broadcaster),” is the office banter as single combined airline entity goal pursued by the Tatas entails scrapping brand Vistara (after approval from regulators) and merging employees of legacy carrier like Air India with a more vibrant and younger airline that is Vistara. Standard operating procedures, processes and people are the biggest challenge of this integration as Vistara is expected to prop up Air India’s game. 

Vinod Kannan is the man in the middle of it all. “We are not done and dusted, yet,” he quips as he settles  down for a media round table at  Gateway Room (Taj Colaba, Mumbai) overlooking the Arabian Sea. He is much more relaxed and forthcoming than in his previous interactions. Signs of stress that this mammoth exercise involves aren’t too visible. Vistara will continue to expand international operations, add more flights and get the aircraft as planned, he said. 

Merger per se is not a worry but compatibility of the two entities and  longevity of the enterprise is the challenging part, ‘Everyone is worried about the wedding, you should be worried about the marriage,’ he said. And perhaps that’s the nub of it all. 

In a freewheeling chat, Kannan speaks in depth about his thoughts on the merger, about his India experience, Vistara’s hurrah moments, his role in the combined entity and managing his people and teams before the merger . Edited Excerpts.

Q: Are you ready to marry Vistara off?

Ans: To a certain extent it’s a wedding yes and as one of my board members said, ‘Everyone’s worried about the wedding, you should be worried about the marriage because it’s not the one  day but everything that happens beyond.’ So, I hope the marriage lasts forever. But from our perspective, whether we like it or not, Vistara doesn’t belong to us, although we have built it. We have a strong view on Vistara and ownership of Vistara emotionally, but ultimately, it’s the shareholders who have to decide and they have decided. I am immensely proud of my staff  – all 5,500 of them – for not giving up. And despite all the distractions we have, they will still make Vistara the airline of India. 

And one will never be hundred percent ready because there will always be emotions attached. But till we are here we will continue to fly high. We will make sure that we will create a brand that others can emulate including the integrated entity. 

Q: When you joined from Singapore Airlines (from low cost subsidiary Scoot) and came to India (2019) what were your thoughts?

Ans: When I came into Vistara, I was looking for excitement because at that time Jet (private airline Jet Airways) has just gone down and Leslie (Leslie Thng, Vistara’s second CEO who Kannan succeeded) was there. I came to see how we can help expand internationally. I thought it’s challenging. It’s India and I am Indian of course, so it makes things easier. But then I realised that working for Singapore Airlines in India, which I am from,  is very different when you’re working in an Indian company. In the end the difference is made by the people and I got excellent set of people

Q: So, you say its different working for Singapore Airlines in India. Singapore is small but evolved aviation market and a very different corporate culture . So, was it a contrast?

Ans: Vistara may not be an ideal benchmark. Yes, it is an Indian airline and it is an Indian company but it is still 49% held by Singapore airlines. A lot of people who started this airline were from Singapore Airlines. Many of the processes and the way things are done are similar as Singapore Airlines does things.

 Having said that working in India is never short of excitement. There are always things that are happening around every corner. Back in Singapore there is so much of structure. SQ is very mature airline because it’s been around for 70+ years.  When  you want something to get done, there is always an SOP and you follow it. 

Whereas when you are starting something, not just in India,  lot of things are being built on the flight, for example, nobody expected us to take the deliveries of the 737 (Boeing single aisle aircraft) on a short term lease when  Jet went down.  Nobody expected that we will take a short term lease of the 787 (Dreamliner, Boeing). Perhaps,  to be very honest and to give credit to the regulator (DGCA), everyone supported us which may not happen in some other countries including Singapore with the same speed.

 So there are positives but yes, it is not as organised or as set or cast because probably it’s not as mature. That is also part of the excitement as it gives you a chance to set the agenda.

Q: At some level, post-merger, don’t you think fliers and Vistara employees might feel cheated? After creating a good full-service brand merge with Air India with huge legacy issues?

Ans: I look at it more as a compliment because they (at Air India) look Vistara as a role model for the bigger entity and which is going to be much bigger after this merger. Whether one  likes it or not airlines need scale. Very honestly, as Vistara I would not be able to get a 470 aircraft order. So given that it is the same shareholders and the confidence that they are banking  upon is also because of what we have achieved as Vistara.  Its  already a feather in our cap. We’ll try our best to make sure that everybody is aligned and we will make and bring the new airline up to the same standard.

Q: What was the exciting part at Vistara ?

Ans : We are not done and dusted yet….

Q: Of course! Yes, but how has it been at the helm and different phases of Vistara?

Ans : Since I took over as the CEO in January 2022 ( Kannan joined Vistara in 2019 as Chief Strategy Officer) it has been a rollercoaster. We had the third wave (COVID). We had lots of complaints because we had to cancel flights, sorted that out.  Since then things have been positive. We hit a billion in  sales , we hit 10% market share, we are now the second biggest airline, we won awards. There are a  lot of positives. 

I think the biggest achievement for me were all those projects, including Haj, which we did for the first time and we didn’t know how to do it,  whole team rallied together. And the people is what makes a difference.

Q: So, what are you telling your people now? People are the toughest part of any merger.

Ans: So, this is not a merger for cost cutting. It’s a merger to grow. The first thing I said and I say it at every opportunity, there is no need to worry about your jobs because there is a job waiting for you. May not be exactly what you are doing (with Vistara) because it (merged entity) will be a much bigger airline. So  it will be a smaller portion of what you doing but there’s definitely a role for you. 

In fact, there is a role because they count on people in Vistara to bring up the level so that is the assurance that I have given to everyone. Second thing is it doesn’t mean that we are done and dusted, there is still a race to go.  The approvals have not still come in and even if the approvals come in we will still be independent for another eight to 12 months. We will still have aircraft coming in. Therefore we have a certain pride and a social responsibility to not let the brand languish, that is something that my team is taken up very positively and I am very proud of it 

Q: How difficult is it to keep employees motivated ? Isn’t there a certain laxity that creeps in?

Ans: So thankfully, it hasn’t happened like that.  A lot of it goes with the tone that is being set by the leadership team. We are very clear and committed that we will celebrate little victories. We will make sure that we put our heart and soul in everything that we do, lot of the projects are still going on. We haven’t cut back and said we’ll stop things as there is a merger coming up.  We had a great set up with the screens at all airports for celebrating  50 million passengers which came out very well. There are a lot of things for our customers as well as staff to be very positive about.  And we will continue to do it. I think morale is a big thing. Mindset is a big thing but what people want to do apart from roles and money remuneration is dignity of labour want to have meaning in what you do and I am here to make sure that we give that meaning

Q: Is this merger a milestone in your career?

Ans: In any career mergers are always tough. In today’s day and age it’s  not that something exceptional, mergers happen in every industry. But the biggest element of the merger, as you rightly pointed out is the people and how the people deal with it and how you bring the people along. I think that for me is going to be a challenge and hopefully if it comes out well, it will be a good achievement.

Q: What about your role in the merged entity? Are you looking at a bigger play at Air India?  

Ans:  I am neutral.  It depends on what role I get , what role I am offered. It also depends on my shareholders Singapore Airlines because I am seconded to Singapore Airlines. I am more than open to it but we will wait and see what is in store.

Q: The hurrah moment for you?

Ans: Operationally breaking even  (October-December 2022) was a big deal. Then Skytrax top 20 airlines list (only Indian airline in top 20, Vistara was 16^th) which was a big deal. I think those two were big moments. 

Q: When  do you think India will get to the stage where it is a mature aviation market, as we see the airline industries globally?

Ans: A mature market is one where different businesses and models can survive independently. And a lot depends to a certain extent on the customer profile. Right now whether you like it or not the fact is that 80 to 90% of the people are still price shoppers and they are still looking for the cheapest fare. The value segment is not as big as what it should be and that is one maturity level and that probably will come in the next four  to five years, as the economy improves further.

 Second one is infrastructure and I think there is a lot of investment on that front. Many airports have come up and more are coming up so. 

And the third is, I think the airline themselves. There is famous saying by an American airline head that says, ‘you are only as good as the most stupid airline cause it’s going to be a race down to the bottom as everyone wants to sell cheap.’  That maturity is definitely not there, at least at this time and you see price wars. So that will take some time as well. Hopefully, as the market is consolidating a bit it will get better but that will also take a few years. 

ENDS