Airlines Vistara has put the brakes on new aircraft orders while it awaits regulatory approval for its merger with Air India. Its chief executive officer said on Tuesday that this, however, would not stop the airline from adding more international routes to boost profits.
The full-service carrier, a joint venture between Singapore Airlines and Tata Sons, will receive its pending order for 17 aircraft by mid-2024 taking its total fleet to 70 aircraft. Tata is also Air India,
“We have not seen any order beyond this,” Vinod Kannan told reporters.
He said, “The announcement has been made about the merger and integration with Air India. Once we get the approval from the concerned authorities, we will sit with Air India as a combined entity to see that we What do you do.”
But Vistara will continue to expand and the airline is “not going to back down” because of the integration, he said.
Tata said in November that it was merging two of its full-service carriers – Air India and Vistara – to form a larger airline to take on local rivals such as IndiGo as well as Middle Eastern carriers that operate out of India. Outbound traffic dominates.
Tata is also expected to announce a new aircraft order for some 495 aircraft for Air India on Friday, Reuters reported, as it looks to revamp the airline under its ownership.
Vistara, which began operations in 2015, reported its first operating profit in the December quarter, helped by strong travel demand and higher fares despite rising fuel costs and a weakening of the rupee against the dollar.
Kannan expects the momentum to continue and flying to more international destinations is a key factor.
“International is where we are going to focus. This is where the value for money for Vistara comes in,” he added.
Vistara deploys up to 30% of its capacity on 12 international routes including cities in Europe, the Middle East and South East Asia. These routes contribute 30% of its revenue.
The airline has shelved plans to start flights to the United States due to delays in receiving deliveries of its Boeing 787 widebody aircraft. Kanaan said it would instead strengthen its presence in Europe where it currently flies with load factors – a measure of how full its planes are -.
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