Vistara (UK, Delhi International) will accept aircraft already ordered but will not place any fresh orders ahead of its anticipated merger with Air India (AI, Delhi International). CEO Vinod Kannan made the announcement in Delhi this week while also reporting the airline's first-ever quarterly profit.
In a January 24 media briefing, Kannan said despite the pause on aircraft orders, 17 pre-ordered planes will arrive at the airline between now and the end of calendar 2024, including one A321-200N, twelve A320-200Ns, and four B787-9s. The new aircraft will take Vistara's total fleet number from its present 53 to 70.
"We have not looked at any orders beyond that," Kannan said. "Once we have (merger) approval from the relevant authorities ... we will have to sit down together with Air India as a joint entity to see what we do." Kannan's comments come as the parent company of both airlines, Tata Sons, is close to finalising what is expected to be a massive aircraft order on Air India's behalf.
Notably, Kannan said Vistara also returned its first-ever profit in 4Q 2022 despite having operated since January 2015. He declined to disclose the exact profit figure but said quarterly revenue had exceeded USD1 billion and that the airline remained EBITDA positive for the current financial year and had secured a 10% plus domestic market share.
"Strong demand resulted in high load factors, and that demand was not turned away due to high fares. We were able to get a very strong revenue performance," he said. Kannan added that Vistara had just enough scale to help offset the impact of high fuel prices and a strong USD.
The CEO also attributed the airline's recent strong financial performance to its burgeoning international network, which is now contributing 30% of the carrier's overall revenue. "International is where we are going to focus. That is where value for money comes in for Vistara," Kannan said. According to ch-aviation schedules data, the airline flies to 45 airports in 13 countries, including Thailand, Singapore, Sri Lanka, Saudi Arabia, the UAE, Oman, the Maldives, Germany, France, and the UK.
"(Widebody flights) have been doing extremely well, and the demand to Europe has been strong. In fact, flights have been flying with load factors in excess of 85-90%. Therefore, that plays a positive role in the performance of the airline.. with significant network and fleet expansion and sustained growth over the last few months, 2022 has been a phenomenal year for Vistara in terms of our operational and financial performance."
However, Kannan did say that along with pausing new aircraft orders, he was dropping short to medium-term plans to fly to the US. With Boeing aircraft delivery delays a contributing factor, the airline prefers to focus on its successful European flights.
