Vistara CEO Vinod Kannan declines to get into specific numbers on the net profit, which the airline declared for the quarter that ended December last year on Monday. The only thing Kannan said was that the profit was excluding unrealized foreign currency loss and non-operating income. Vistara’s remains silent about break even in Q4.
In the statement issued on Monday, Vistara said it crossed the $1.0 billion revenue mark and remained EBITDA-positive in the current fiscal year and reported breaking even for the first time in the quarter that ended December 2022. Vistara was established in 2015.
“About what is the actual number as well as what is the impact of currency, unfortunately, we cannot divulge that at this time. We will definitely do the filing of our financial statements at the end of the financial year,” Vinod Kannan said at a virtual media round table to which Airinsight was invited.
When Airinsight asked whether the declaration of the net profit had anything to do with the fact that Singapore Airlines is investing in Air India and could bargain for a better price valuation for its share in the Indian carrier, Kannan said: “I am not sure about the timing of the evaluation and the evaluation process because if you look at it objectively, once the announcement was made (Singapore Airlines buying a stake in Air India), which was sometime in November, that process would have already kicked off and started. If anything, it’s a coincidence and there was no such thought applied to it. And given that we closed our accounts, and this was for October to December it’s just the timing. I can assure you, there was no other deeper reason.”
When Airinsight inquired as to why for the first time since its inception, the airline had issued a press statement about its financials, Kannan shot back: “The short answer actually is that this is the first time that we’ve made money in the quarter.”
Kannan added that Vistara will close 2023 with a fleet of 60 aircraft from the current 53 aircraft as it was to return three Boeing 737 in the fleet currently. “By end of calendar 2024 we will have a fleet of 70 aircraft,” he added. He added that the Boeing 787 aircraft joining the fleet will probably be deployed on the current routes that the airline is operating to Europe as they are doing well. “We will continue to look at that. And of course, for the last two or three 787s, we will also be looking at other possible destinations around the world.”
Hard to understand
Commenting on the latest Vistara results, Satyendra Pandey, Managing Partner of aviation services firm, AT-TV, said that Vistara’s announcement is interesting and intriguing at the same time. “Effectively it is an earnings announcement without any numbers in it. Thus, it is hard to understand what exactly the breakeven indicates,” he said.
Pandey said that for Q3 what we see for more stable airlines includes a strong demand environment, high yields, and a pickup in corporate demand. “This includes both domestic and international segments where Vistara is placed well. The weakness of some of its competitors is also playing well and this is reflected in the market share figures where Vistara ended the quarter with 9.2 percent of the domestic market with a load factor of 91.9 percent flying a fleet of 54 aircraft across 43 destinations.”
He added that the timing of the announcement was generating a fair amount of buzz as it came at a time when Singapore Airlines is to finalize the value of its Air India stake including equity infusions and at a time when the Vistara staff is being integrated into Air India. “Once actual numbers follow the announcement, a more accurate picture will reveal itself,” he said.
