The collapse of Jet Airways last April benefited Vistara, as it got access to airport slots and premium-class traffic.
Vistara’s pre-tax loss widened to Rs 1,814 crore in FY20, against Rs 831 crore in FY19 due to higher operating costs.
The revenue grew 58 per cent to Rs 4,738 crore as the airline inducted planes and expanded its network but high costs and muted passenger demand in the fourth quarter impacted results.
This is the highest single-year loss for Tata Sons-Singapore Airlines joint venture since its began operations in 2015.
The revenue and loss figure is mentioned in Tata Sons’ 2019-20 annual report. The two joint venture partners have been funding the airline to support the airline’s growth plans. The annual report mentions that Tata Singapore Airlines (Vistara) has a share capital of Rs 5,320 crore, and negative reserve and surplus of Rs 4,477 crore.
The collapse of Jet Airways
last April benefited Vistara
as it got access to airport slots and premium class traffic. It also inducted seven Boeing 737
aircraft flown by Jet Airways
and its overall fleet increased from 22 to 40 year by March end. The number of destinations rose from 24 to 36 including five foreign destinations.
“The challenge for Vistara
has really been cost control. The airline has been renegotiating its vendor contracts especially those related to reservation systems, and Covid-19 has given it further opportunity to look at cost control. The other factors behind the loss could be slower ancillary revenue growth and overheads related to international operations. On the positive side, Vistara’s loss margin fell sharply due to improved revenue performance last year,” said an aviation expert.
In an email response, a Vistara
spokesperson said: “The expense of operations remained high throughout FY20 and the increasing price of ATF remained one of the biggest cost contributors throughout the year. With a robust business strategy in place, we continued to follow our growth plans. Over the last year, we expanded our network by close to 50 per cent, announcing eight domestic destinations and launching international operations to five destinations in quick succession. We also nearly doubled our fleet size by the end of the financial year ending March 2020, when compared to the fleet size at the start of FY20.”
“Our growth journey got severely impacted with the outbreak of Covid-19 pandemic and the temporary suspension of operations during the nationwide lockdown. To deal with the situation we have been pursuing several measures to reduce non-customer facing operating expenditures and making every effort to conserve cash wherever possible,” the spokesperson said. The airline said it was renegotiating various contracts with partners, vendors, and lessors and had temporarily reduced some of its staff cost.