NEW DELHI: Vistara, which had started flying in January 2015 and reported its first operationally profitable quarter in October-December 2022, has seen its highest ever revenue per seat km (RASK) — or yield/ticket prices in simple terms — in the October-December 2022 period when travel rebounded big time post Omicron.
And thanks to higher aircraft utilisation, its cost per available seat km (CASK) fell by 20-22% without factoring in fuel prices that were at record high levels for several months last year in that period over same time of 2021.
Taking fuel into account, CASK had risen by 5-7%. “Our RASK in April-December 2022 over same period in previous year was higher by 40%. While all airlines were able to charge a premium in October-December 2022, we could also do so a little more due to our premium product offering,” Vistara chief commercial officer Deepak Rajawat said Tuesday, a day after the announcement of the first ever operationally profitable quarter was made. It did not share the quantum pf profit made in Q3.
Airfares have been very high in the past few months — unprecedented in the case of international flights across airlines — ever since travel demand revived.
While initially airlines saw pent up demand, now the regular demand from all segments — leisure, business, visiting friends and relatives and MICE (meetings, incentives, conferencing & exhibitions) — has returned.
Vistara has put its US plans on hold as the airline is all set to be merged with Air India by next March. The JV full service carrier of Tata Sons and Singapore Airlines (SIA) will instead strengthen its existing international network, including to Europe where it has a presence, over the next few months as it inducts 17 more previously ordered aircraft till late 2024.
“As of now we have 53 aircraft in our fleet that includes 5 Airbus A321s, three (including one leased for three years) Boeing 787 Dreamliners and remaining A320 family aircraft. We were supposed to get all our ordered 70 aircraft by mid-2023, something which was delayed by Covid. Now over the next one year or so we will induct the remaining 17 aircraft — including four Dreamliners and five A321s. The A321s and B787s will be used mostly for international flights,” Vistara CEO Vinod Kannan, an aviation veteran, said on Tuesday.
Vistara was looking at starting US flights but the decision to merge it with AI — which is majorly expanding North America operations — has made those plans redundant now.
“Before Covid (Jan 2020), we did not have any A321 or B787. Now we have eight of those aircraft. Almost 25-30% of our capacity is deployed on international routes. Going ahead (till the merger with AI is completed) we will increase both our domestic and international flights,” Kannan said.
However, now with Tatas and SIA agreeing on AI-Vistara merger, route expansion by the now-profitable airline will essentially complement AI’s network instead of competing with it. Dropping of the long-in-the-works US plans (a one-stop via London was planned) is case in point. Now both AI and Vistara will add flights to different European destinations so as to be present in as many places it makes commercial sense to do so by the time the merger is completed.
