After delivering a profit in the third quarter of the current fiscal, Vistara is looking to expand its fleet even as it remains cautiously optimistic about maintaining its profitability in the last quarter of FY23.
Addressing the media, Vinod Kannan, the CEO of Vistara, said the airline will add seven aircraft to its fleet by the end of this calendar year, taking the total fleet size to 60 aircraft. It will take the fleet size to 70 by mid-next year.
On Tuesday, Kannan said the yields during the first 25 days of January have been above average, and despite it being a lean season, he is optimistic that the growth will sustain the trajectory unless unforeseeable circumstances arise.
On Monday, the company announced that it had posted a profit for the first time since its inception. The airline reported a net profit (excluding unrealised foreign currency loss and non-operating income) for the quarter ended December 2022. The airline achieved its highest ever domestic market share of 10.4 per cent in July 2022 and has maintained its position as the second-largest domestic airline in India since then, flying more than 11 million passengers in the calendar year 2022.
When asked about the key growth drivers he said that “Travel demand is back, the cost of aviation fuel has reduced, and the revenue per ticket has increased by 30-40 per cent, which boosted our profitability.”
Deepak Rajawat, the COO of Vistara, added that in the past year, the airline has added 30 new routes and seven destinations. “We have reworked our network, and created a second hub from Bombay, which has boosted our growth.”
Speaking about the current revenue mix, Kannan said that the airline currently generates 70 per cent of its revenues from domestic travel and 30 per cent from international travel. “We are waiting for the deliveries of aircraft because we know our true potential lies in long-haul travel, and that is where we have a competitive edge.”
On aircraft deliveries, he said that by the end of this calendar year, the airline expects to add seven aircraft to its fleet, taking the total to 60 aircraft. By mid-next year, Kannan said it will have a total of 70 aircraft, including 7 Boeing 787s. Out of the total 70 planes, there will also be 10 A321s and 53 A320 neos.
Multiple media reports have suggested that there has been a supply chain crunch for aircraft deliveries. On this, Kannan said: “The crunch continues for both wide-body and narrow-body. While we are expecting an official confirmation from them, we hope to get them by mid-2024.”
Vistara, which is a full-service carrier and a joint venture of Tata Sons and Singapore Airlines, is set to be merged with Air India.