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Vistara targeting to make FY23 its first-ever profitable year

The Tata group-promoted airline said that it has generated profits at each of the first three quarters this year, but at the operating level.

Vistara targeting to make FY23 its first-ever profitable year
Vistara is awaiting deliveries of five Airbus A321s besides the 787s. (IE)

The current financial year may turn out to be the first-ever profitable year at the operating level for full-service carrier Vistara, if it is able to tide over the lean March quarter through discount offers typically seen during this period.

The Tata group-promoted airline said that it has generated profits at each of the first three quarters this year, but at the operating level. At the net level, however, reasons like adverse foreign exchange fluctuations have restricted the company’s attempts to become profitable.

Speaking to FE, Vinod Kannan, chief executive officer, Vistara, said, “We will definitely close the year with positive EBITDA. In the January-March quarter, we will try our best to ensure that there is an operating profit.”

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The company further said that it has been profitable at the EBITDA level from the start of the year. Including rent in the first two quarters, the company did not make profits but during the December quarter all costs, including rental payments, have broken even.

A strengthening rupee against the US dollar in recent months, in addition to the returning leisure traffic of December and January, are the key pointers Vistara is betting on to continue its profitable run in the final quarter.

On Monday, without disclosing the absolute profit numbers for the quarter ended December, Vistara said its revenues during the April-December period surpassed $1 billion, a first in its nine-year run.

Kannan added that Vistara is on course to augment its current fleet size by 32% through the addition of 17 aircraft by the end of 2024. He also said that the company is exploring the addition of multiple overseas locations to Indian cities, primarily Mumbai.

While Vistara’s domestic network has grown to 50 flights a day from Mumbai, the city has got more international flights for the airline than Delhi. Mumbai is connected to Singapore, Bangkok, Dhaka, Kathmandu, Male and the Middle East.

“The Middle East is a focus area and we will announce something in the coming weeks. We have only connected Delhi to Europe for now. We need international long-haul flights from Mumbai,” Kannan added.

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Sources say Vistara is looking to add London to the list of destinations with the new Boeing 787, due for induction before April-end. The wide-body Boeing 787s are typically used for long-haul operations like on the India-Europe or India-US routes. Kannan declined to share the airline’s connectivity plans.

“We have three (Boeing) 787s, out of which two are owned and one is leased. We have four more to come in the next 12-15 months. By the end of FY24, we should be having all the 787s in our fleet,” added Kannan.

Vistara is awaiting deliveries of five Airbus A321s besides the 787s. Supply chain issues that have created problems for all airlines in the world have led to delays in deliveries to Vistara as well. By the end of the year, Vistara hopes to have 60 aircraft in its fleet.

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First published on: 25-01-2023 at 04:40 IST