Indian carrier Vistara announced today that it would not be ordering any new aircraft ahead of its proposed merger with Air India. The airline will honor its existing aircraft orders, the bulk of which will be put towards further international expansion.

Vistara, a joint venture between Singapore Airlines and India’s Tata Group, currently has 17 outstanding aircraft on order – 12 Airbus A320neos, one Airbus A321neo, and four Boeing 787-9s. It plans to receive these by the end of 2024, taking its total fleet to 70 – quite impressive for an airline that only commenced operations in 2015.

The airline’s chief executive officer, Vinod Kannan, confirmed the current situation, saying,

“We have not looked at any orders beyond that [2024]. There has been the announcement about the merger and integration with Air India. Once we have approval from the relevant authorities, we will sit down together with Air India as a joint entity to see what we do.”

Vistara and Air India – going from strength to strength

In November last year, Tata revealed that Vistara would be merging with its other full-service carrier, Air India, putting the group in a stronger position to compete with its main rival IndiGo. The low-cost carrier’s fleet recently surpassed 300 aircraft, making it a considerable threat, particularly in the Indian domestic market. Significant competition on routes to and from the Middle East also comes from Emirates and Qatar Airways.

Tata’s position in the market will be further bolstered later this week when the group is expected to follow the likes of United Airlines and announce an immense aircraft order. The order is understood to be for an incredible 495 aircraft, all of which will go to Air India.

Financially speaking, Vistara is stronger than ever. Despite rising fuel costs and a weak rupee versus the dollar, the combination of increased demand for travel in India and higher fares helped the airline to record its first operational profit in Q4 of last year.

Further international expansion on the horizon

Vistara currently operates 12 international routes, including its newly launched Pune (PNQ) to Singapore (SIN) and Mumbai (BOM) to Muscat (MCT) services, and international expansion will remain the airline’s focus in short to medium term. And it is easy to see why – according to Kannan, the carrier’s international flights have an average load factor of 85-90%, and these 12 routes alone make up 30% of its total revenue. He said,

“International expansion will be a focus going forward. It plays a strong role in the performance of our bottom line.”

As a result of Boeing’s well-documented delivery delays affecting its 787-9 aircraft, Vistara has had to put plans to fly to the US on hold for now. However, it is undoubtedly only a matter of time before major US cities join the airline’s growing long-haul route network.

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