Vistara may not need fund infusion for 6 months
2 min read . Updated: 24 Jan 2023, 08:39 PM IST
Premium- The airline said that it has broken even in Oct-Dec for the first time in a quarter since it commenced operations in January 2015
Full-service carrier Vistara is not expected to seek any fund infusion from the promoter group of Tata Sons and Singapore Airlines for 3-6 months on the back of a strong quarter in Oct-Dec, Chief Executive Officer Vinod Kannan said today.
“For the next 3-6 months, we don’t need additional capital infusion. We can manage on our own," he said.
The airline on 23 Jan said that it has broken even in Oct-Dec for the first time in a quarter since it commenced operations in January 2015. The airline also crossed $1 billion revenue mark and remained EBITDA positive in the current fiscal year so far.
Vistara, which is currently undergoing merger preparations with Air India, aims to further expand its fleet size to 60 aircraft by 2023 end from current size of 53 airplanes. This is expected to increase to 70 planes by 2024, he said, adding that the airline has been promised to receive all pending deliveries of Boeing 787s by March 2024.
The airline awaits clarity from the promoter groups on the merger plan and will be able to take a decision on expansion of capacity via a fresh order of aircraft post that, he said.
While the average ticket price and yield have come softened from the levels seen in the December quarter, Kannan is optimistic of a correction in fuel prices to ease cost pressure in the March quarter, a traditionally weak quarter in terms of travel sentiment.
“We are hopeful of breakeven on operating profit in Q4 too," he said.
For the quarter ended December 2022, the airline grew its capacity by 37% and passengers by 47% compared to the same period last year.
In line with its peers in the market, the airline also plans to increase its international operations from the current share of 30-35%. The airline currently flies to 31 domestic and 12 international destinations.
On 29 November, Singapore Airlines and Tata Group announced a merger between Air India and Vistara, with Singapore Airlines holding 25.1% of the merged entity. The merger is expected to be completed by March 2024. Vistara is a 51:49 joint venture between Tata Group and Singapore Airlines.