LONDON – Two more airlines under the Indian brand Tata shared their results for the last financial year – AirAsia India and Vistara. Like their older sister Air India, the two airlines have also reported mounting losses due to successive waves of COVID, rising fuel prices and the depreciation of the Indian rupee against the US dollar.
Air Asia India
Launched in 2014 as a joint venture between Tata Group and AirAsia Investment Limited, AirAsia India initially owned 51% of Tata, which rose to 83.67% in 2020.
The airline has had two tough years due to the pandemic, increasing its 42% year-over-year loss to nearly $275 million. Its revenue rose nearly 39% to $238 million, but a 67% increase in jet fuel and the weakening of the Indian rupee against the US dollar affected the overall figures.
Last year, AirAsia India posted an annual loss of $193 million, nearly double the previous year, and revenue of $171 million. It was reducing operations and returning seven Airbus A320s to AirAsia Berhad, and it currently has a fleet of 26 A320s.
The Tata Group’s full-service subsidiary, Vistara, has also struggled over the past financial year. Its losses rose 35% to $256 million on a year-on-year basis, while revenue more than doubled to $659 million.
The airline explained these figures saying: “The first half of FY22 was significantly impacted by the second wave of Covid-19, while the second half saw a rebound in demand, although high fuel prices continues to be challenging.”
“We have also spent a significant part of 2021 strengthening our domestic network, expanding our international footprint and investing in the expansion of our fleet.”
A possible merger
Although there is no official announcement yet, a merger with fellow Tata Group carriers for both Vistara and AirAsia India is expected. Since starting operations in 2015, Vistara has never made a profit.
However, it has tried to build a specific brand identity that revolves around its services and experience that is somewhat different from other Indian airlines, such as offering a premium budget product and Starbucks beverages onboard.
Fleet and network expansion have been a big part of Vistara’s strategy, with the company aiming to have 70 aircrafts by March next year. Rumors about its merger with Air India have been circulating for a while now, but so far, the two airlines seem to be going their own way.
AirAsia India is awaiting 100% ownership of Tata as a case against some of the carrier’s top executives stands in the way of its international expansion plans.
Like Vistara, AirAsia India has also faced questions over a potential union with low-cost airline Air India Express, but owners will have a lot to consider before combining it with a profitable enterprise like AI Express.