AirAsia India and Vistara’s losses widened in the financial year ended March 31, 2022 (FY22) on a year-on-year (YoY) basis due to the impact of the Covid-19 pandemic and an increase in operating costs, according to Tata Sons’ FY22 annual report.
While aviation turbine fuel prices jumped around 67% and the rupee weakened by 0.4% against the dollar in FY22 over FY21, passenger demand too was impacted by two waves of the pandemic. This had a toll on the airline’s financial results.
AirAsia India’s loss grew 42% on a YoY basis to INR 2,178 crore, while its revenue rose nearly 39% to INR 1,887 crore. The airline had a negative reserve and a surplus of INR 4,849 crore.
Vistara’s loss rose by 35% on a YoY basis to INR 2,031 crore while its revenue jumped 2.3 times to INR 5,226 crore in FY22. It reported a negative reserve and a surplus of INR 8,120 crore at the end of March 2022.
On the other hand, Vistara has been gradually building up its fleet and network. Vistara launched operations in Europe deploying its wide-body Boeing 787 aircraft and also operated charter flights resulting in revenue growth. It currently has 53 aircraft and its fleet will go up to 70 by end of the calendar year 2023.
“The first half of FY22 was significantly impacted by the second wave of Covid-19, whereas the second half enabled demand recovery, although high fuel prices continued to be a challenge. We also spent a large part of 2021 densifying our domestic network, expanding our international footprint and investing in expanding our fleet.”Vistara
Fleet and network expansion has been a big part of Vistara’s strategy, with the carrier aiming to have 70 aircraft by March next year. Rumours about its merger with Air India have been circling for a while now, but so far, both airlines seem to be heading on their trajectory.
AirAsia India is waiting to come under 100% ownership of the Tatas as a case against some of the carrier’s top executives are acting as a roadblock to its international expansion plans.
Like Vistara, AirAsia India, too, has been facing questions about a possible union with the budget carrier Air India Express, but the owners will have a lot to consider before bringing it together with a profitable enterprise like Air India Express.