LONDON – Indian full-service carrier Vistara has reported its first ever profit in Q4 of 2022. Vistara is a joint venture between Tata Sons and Singapore Airline. AviationSource writer Gaurav Gowda reports:
The airline has finally turned the tables around and reported profit for the first time since its inception in 2015, as it crossed its $1 billion revenue benchmark.
In 2022 Vistara soared to new heights – they had their highest domestic share in July 2022, and continued to remain the second largest airline in India ever since. Vistara launched new International as well as domestic routes.
The airline registered 11% YoY (year on year) growth. The airline also reported achieving second highest on-time performance in the four metro cities – Mumbai, Chennai, Delhi, Kolkata.
Vistara overtook the likes of LCC’s in India, such as Go First, SpiceJet, etc. Once upon a time having a full-service carrier in India and turning profitable was a dream for many companies. The Indian market is dominated by IndiGo – India’s largest airline and a low-cost carrier.
IndiGo is known for its deep discounts and has monopoly on many routes, Indian aviation being a price sensitive market survival and turning profitable for a full-service carrier like Vistara was a huge challenge.
Vistara took deliveries of 10 new aircraft, taking its fleet size to 53. Though, Vistara has now confirmed that it will not place order for new aircrafts as Vistara is set to be merged with Air India in sometime next year.
The airline was able to achieve its highest load factor mainly because of its aggressive pricing which allowed it to directly compete with the LCC’s in India. In many instances fare difference between Vistara and any LCC was merely $15-$25, which turned in favour of Vistara.
As with the low-cost carriers; after paying for the ticket, one has to pay around $4-$10 for seat selection of their choice and pre-booking a meal (in LCC’s its mostly cold sandwich).
This costs minimum of $5 dollars and upwards, but now Vistara offers you complimentary hot meals on-board and seat selection (apart from emergency exit) is free of cost. This helped maintain over 85 percent load factor for most of 2022.
Vinod Kannan, Chief Executive Officer, Vistara, said: “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.”
“Each member of the Vistara family is incredibly proud of our collective achievements in an extremely challenging business environment that included the third wave of pandemic and escalating costs. We are now aiming for higher goals as we enter the next phase of our growth journey.”