Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Airlines

India’s Vistara Reports Profit for First Time Since Inception

1 week ago

Indian carrier Vistara reported its first-ever net profit for the quarter ending December 2022, according to statement from the airline on Monday.  

The full-service carrier, a joint venture of Tata Sons and Singapore Airlines, reported break even for the first time since its inception in 2015 as it crossed the $1 billion revenue mark and remained earnings before interest, taxes, depreciation, and amortization positive in the current fiscal year.

In 2022, Vistara reported that it grew its international network by over 180 percent adding seven routes including three new destinations Muscat, Jeddah and Abu Dhabi.

The airline said that it grew its domestic network by over 50 percent, by adding six new routes and two new destinations Coimbatore and Jaipur.

While the airline did not share numbers, but for the quarter ending December 2022, it reported a 37 percent growth in capacity and a passenger increase of 47 percent compared to the same period last year.

Since July 2022, the airline has maintained its position as the second largest domestic airline in India, flying more than 11 million passengers in the calendar year 2022.

Vistara also registered a 11 percent year-on-year growth in the member base for its frequent flyer program Club Vistara.

The airline currently operates close to 8,500 flights per month.

“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,” Vinod Kannan, Vistara CEO, said.

Speaking earlier to Skift in an interview, Kannan had mentioned that the element of revenge travel has worked for the airline.

Vistara is also getting ready for a merger with Air India, the erstwhile Indian state carrier, that had been acquired by Tata Sons, via its subsidiary, Talace, early last year as part of a $2.4 billion deal.

The Vistara-Air India merger is said to be completed by March 2024, following which Air India shall be India’s largest international carrier and second largest domestic carrier with a combined fleet of 218 aircraft.

Airlines

Air India-Vistara Merger to be Completed by March 2024

2 months ago

Tata Sons and Singapore Airlines have agreed to consolidate Air India and Vistara by March 2024.

As part of the merger transaction, Singapore’s flag carrier shall also invest $250 million in Air India for a 25.1 percent share, according to a media release on Tuesday.

Tata Group owns a 51 percent stake in Vistara with Singapore Airlines owning remaining 49 percent.

With this consolidation, Air India shall be India’s largest international carrier and second largest domestic carrier with a combined fleet of 218 aircraft.

Air India had earlier announced its plans to increase its fleet size to 143 by the end of 2023 and also introduce Premium Economy seating. Intrestingly, Vistara is the only airline in the country offering Premium Economy seats.

Post the merger, Air India would offer both full-service and low-cost service across domestic and international routes, said N Chandrasekaran, chairman of Tata Sons.

Air India, the erstwhile Indian state carrier, had been acquired by Tata Sons, via its subsidiary, Talace, early this year as part of a $2.4 billion deal.

Singapore Airlines said it intends to fully fund this investment with its internal cash resources, which stood at $13 billion as of September 30.

The two companies have also agreed to participate in additional capital injections, if required, to fund the growth and operations of the enlarged Air India in financial year 2023 and 2024.

Based on Singapore Airline’s 25.1 percent stake post-completion, the airline said that its share of any additional capital injection could be up to $615 million, payable only after the completion of the merger.

The actual amount would depend on factors including the progress of the enlarged Air India’s business plan, and its access to other funding options.

Speaking earlier to Skift, Vistara CEO Vinod Kannan, while not totally denying reports of a merger between the two airlines, had said, “I tell my team that no matter what, the 54 aircraft that we have will have to be serviced, sold and operated. Until we are told otherwise, we will maintain that we will be operating independently.”

Airlines

AirAsia India-Air India Merger by 2023 as AirAsia Sells Off India Stake to Tatas

3 months ago

Budget carrier AirAsia India is likely to be merged with Air India Express by the end of 2023. An operational review process is underway to integrate the two carriers, Air India said in a statement this week.

The merger news follows Malaysia-based AirAsia Aviation Group’s announcement on Wednesday that it has sold off its remaining 16.67 percent stake in AirAsia India to Tatas-owned Air India.

The agreement that will fetch AirAsia $18.83 million, also states that AirAsia India can continue to use the ‘AirAsia’ brand name for 12 months.

Aimed at having a single low-cost carrier for the Air India group, following the merger the entity will be branded as Air India Express, a statement read.

In June, Indian watchdog Competition Commission of India had approved the proposed acquisition of the entire shareholding of AirAsia India by Air India.

Following the acquisition of Air India and Air India Express in January, the Tata Group now owns four airlines — Air India, Air India Express, AirAsia India and Vistara. Vistara is a joint venture with Singapore Airlines.

In a recent interview with Skift the Vistara CEO when asked about a possible merger between the airlines under the Tata fold had said that there are certain discussions that have been happening which he is not privy to.

Commenting further on AirAsia selling off its remaining stake to Air India, Group CEO of AirAsia Aviation Group, Bo Lingam, said Covid has allowed them to re-examine priorities, and the group feels it is best suited for AirAsia to develop an Asean-only business with airlines in Malaysia, Thailand, Indonesia and the Philippines.

“We will use the experience and knowledge we have gained from operating in the Indian domestic market to grow the Asean-Indian market in logistics and passenger services to a far greater extent,” Lingam added.

Launched in 2014, AirAsia India currently flies to 18 destinations with a market share of 5.9 percent.

Airlines

Singapore Airlines and Tata Talk Potential Air India Stake

4 months ago

With a former Singapore Airlines executive at the helm of Air India, it comes with little surprise that the Singaporean airline could take a stake in the Tata Group-owned Indian flag carrier.

Singapore Airlines disclosed Thursday that it was in “confidential discussions” with Tata to “deepen” the companies’ existing partnership, and a potential merger of Air India and Vistara. Indian carrier Vistara is jointly owned by Tata (51 percent) and Singapore Airlines (49 percent).

Singapore Airlines did not say what that deeper partnership could be, but Reuters reported that it could include a minority stake in Air India.

singapore airlines Boeing 777-200 in Singapore Airlines livery source singapore airlines
(Singapore Airlines)

India, with nearly 1.4 billion people, is widely viewed as one of largest growth markets for aviation around the world. However, airlines have long struggled to penetrate the market that suffers from infrastructure and other constraints. Numerous carriers have tried — and failed — including Jet Airways (the first incarnation) and Kingfisher.

Singapore Airlines described India, and its Vistara investment, as an “integral part” of its multi-hub growth strategy. A stake in Air India would give the Singaporean airline even deeper penetration in the market.

Airlines

Singapore Airlines Veteran Campbell Wilson to Lead Tata’s Air India

9 months ago

Tata Sons has named Campbell Wilson to lead Air India as the group launches its restructuring of the beleaguered flag carrier.

Wilson will join Air India from Singapore Airlines’ budget subsidiary Scoot, which he has led since 2020. He has worked in various roles at Singapore Airlines, a carrier known for high levels of passenger service and quality, since 1996. Wilson’s appointment as CEO of Air India is subject to approval by the airline’s board and regulators.

“Air India is at the cusp of an exciting journey to become one of the best airlines in the world, offering world-class products and services with a distinct customer experience that reflects Indian warmth and hospitality,” Wilson said in a statement. “I am excited to join Air India and Tata colleagues in the mission of realizing that ambition.”

Wilson has his work cut out for him. The Tatas acquired Air India from the Indian government in January after decades of state ownership. The airline has many lucrative assets, including international air route rights to many countries, but has been a perennial loss maker known for poor service under state leadership.

Read the Tata Sons Release

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