What does this mean for the airline’s outstanding aircraft orders and its future international expansion plans?
Indian carrier Vistara announced earlier today that it will not be ordering any new aircraft ahead of its proposed merger with Air India. The airline will however honor its existing aircraft orders, the bulk of which will be put towards further international expansion.
Vistara, a joint venture between Singapore Airlines and India’s Tata Group, currently has 17 outstanding aircraft on order – 12 Airbus A320neos, one Airbus A321neo, and four Boeing 787-9s. It plans to receive these by the end of 2024, taking its total fleet to 70 – quite impressive for an airline that only commenced operations in 2015.
The airline’s chief executive officer, Vinod Kannan, confirmed the current situation, saying,
“We have not looked at any orders beyond that . There has been the announcement about the merger and integration with Air India. Once we have approval from the relevant authorities, we will sit down together with Air India as a joint entity to see what we do.”
Photo: Vincenzo Pace | Simple Flying
Vistara and Air India – going from strength to strength
In November last year, Tata revealed that Vistara would be merging with its other full-service carrier, Air India, putting the group in a stronger position to compete with its main rival IndiGo. The low-cost carrier’s fleet size recently surpassed 300 aircraft, making it a considerable threat, particularly in the Indian domestic market. Significant competition on routes to and from the Middle East also comes from airlines such as Emirates and Qatar Airways.
Tata’s position in the market will be further bolstered later this week, when the group is expected to follow the likes of United Airlines and announce an immense aircraft order. The order is understood to be for an incredible 495 aircraft, all of which will go to Air India.
Financially speaking, Vistara is stronger than ever. Despite rising fuel costs and a weak rupee versus the dollar, the combination of increased demand for travel in India and higher fares helped the airline to record its first operational profit in Q4 of last year.
Further international expansion on the horizon
Vistara currently operates 12 international routes, including its newly launched Pune (PNQ) to Singapore (SIN) and Mumbai (BOM) to Muscat (MCT) services, and international expansion will remain the airline’s focus in the short to medium term. And it is easy to see why – according to Kannan, the carrier’s international flights have an average load factor of 85-90%, and these 12 routes alone make up 30% of its total revenue. He said,
“International expansion will be a focus going forward. It plays a strong role in the performance of our bottom line.”
Photo: KITTIKUN YOKSAP | Shutterstock
As a result of Boeing’s well-documented delivery delays affecting its 787-9 aircraft, Vistara has had to put plans to fly to the US on hold for now. However, it is surely only a matter of time before major US cities join the airline’s growing long-haul route network.
What do you think of Vistara’s upcoming merger with Air India? Have you flown on the airline recently? Share your thoughts and experiences by commenting below.