Vistara Sets the Stage for Foreign Operations, Orders 19 Planes Worth $3.1 Billion

Indian domestic airline Vistara is adding 19 more aircraft to its fleet to support its international operations planned for launch later this year. Vistara, a joint venture of Tata Sons and Singapore Airlines, has agreed to place firm orders with Airbus for 13 aircraft from the A320neo family and with Boeing for six 787-9 Dreamliner planes, the airline said in a statement. Together, the deals are worth $3.1 billion, based on published list prices.

Vistara currently has a fleet of 21 aircraft, making it eligible to fly on international routes under the National Civil Aviation Policy 2016.

It will add a total of 50 A320neo-family aircraft to its existing fleet, the statement added. The letter of intent signed with Airbus comprises 13 firm-ordered A320neo and A321neo aircraft, as well as options for seven more aircraft from the A320neo family. Vistara will also lease another 37 new A320neo-family aircraft from leasing companies.

The letter of intent signed with Boeing comprises six firm-ordered 787-9 Dreamliner and Purchase Rights for four more aircraft from the 787 Dreamliner family. The 787-9s are intended for use on medium-haul and long-haul international routes, the company said.

“The aircraft purchase will help Vistara expand both within and outside India and on all routes that this aircraft could support us on,” Vistara’s chief executive Leslie Thng told Mint. “For medium to long-haul destinations, we decided that Boeing 787-900 (Dreamliner) would be best for us and would allow us to start medium-haul operations from 2020,” he added.

The A320neo and A321neo aircraft will be due for delivery between 2019 and 2023 while the Dreamliner planes are scheduled to join the fleet between 2020 and 2021.

With the launch of its international operations, the airline will become the first Indian carrier to fly abroad since 2011, when budget airline IndiGo started foreign flights. Only Air India and Jet Airways currently operate wide body aircraft for long-haul flights. Air India flies Boeing’s 787 and 777 planes, while Jet Airways operates Boeing 777s and Airbus A330s, the Indian Express reported.

Indian low-cost carriers IndiGo and SpiceJet only fly international on shorter routes to destinations in the middle east and southeast Asia, and are now planning to start long-haul flights. IndiGo has around 400 single-aisle A320 and A321 jets on order, and is adding six planes every month on an average to its fleet, according to the Business Standard. Jet and SpiceJet, on the other hand, have over 200 Boeing 737 MAX planes each on order, the report said.

Vistara, which started operations in 2015, currently connects 22 destinations in India with over 800 flights a week. The airline is yet to become profitable and has been able to garner only 4 percent of the domestic market, the publication added.

When it launches the international flights by December 2018, Vistara will begin with shorter routes in the range of three-five hours and then expand to medium and long-haul destinations in Europe and North Asia after 2020, Livemint.com reported.

“The robust growth of the Indian market offers an opportunity to all to do business. When we operate international routes too, our much bigger rivals will not stay silent. But the rationale behind the order is that we see an opportunity for ourselves and are ready to tap into that,” Thng said, the Business Standard reported.