Vistara places $3.1 billion jet order in growth plan
With the purchase of Airbus, Boeing planes, Vistara aims to compete with domestic carriers and start flying on international routes by year-end
Mumbai: Full-service airline Vistara on Wednesday said it has decided to order 19 planes worth $3.1 billion from Airbus SE and Boeing Co. The airline, a joint venture between Tata Sons and Singapore Airlines, is looking to start international flights by December.
Since the order includes both narrow and wide-body planes, the purchase will allow Vistara to take on domestic airlines and fly abroad.
Limited slots at key airports have often kept Vistara from challenging market leader IndiGo. The airline which started flying in January 2015 currently has about 4% of the local market share.
“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,” Thng added.
“If you look at the number of narrow-body aircraft we are bringing in, you will realize that we have the intention to expand our domestic footprint,” he said.
The letter of intent signed with Airbus includes 13 firm-ordered Airbus A320neo and A321neo aircraft, as well as options for seven more aircraft from the A320neo family, the airline said in a statement.
Vistara will also lease another 37 new A320neo-family aircraft from leasing companies, it said, adding that it will induct a total of 50 A320neo-family aircraft into its fleet.
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.
Vistara, which is hoping to fly international by December 2018, will initially fly to destinations within three-five hours range and eventually fly to medium and long-haul destinations in Europe and North Asia, among the other destinations after 2020.
The airline, which currently connects 22 destinations in India, has 21 Airbus aircraft in its fleet consisting of 13 A320 CEO (current engine option), and 8 A320neo (new engine option), all of which are on lease.
It will take delivery of one A320neo, on lease, in September 2018.
Vistara’s upcoming A320 neo and A321 neo planes will be powered by CFM International’s LEAP 1-A engines while 787-9 Dreamliner planes will have GEnx-1B engines.
While the narrow-body Airbus aircraft will be delivered between 2019 and 2023, at about 10-11 aircraft per year, the airline will take the delivery of six wide-body Boeing 787-900 (Dreamliner) aircraft between 2020 and 2021.
Vistara, one of the three full-service carriers in India, is the only local airline to have a premium economy class. Its 148-seater Airbus A320-200 offers three separate cabins—business, premium economy and economy class—while competitor Jet Airways has a two-class configuration that includes business and economy. National carrier Air India provides options for three classes to its passengers that include first class, business class and economy.
Aviation consultant CAPA India’s Kapil Kaul said Vistara’s upcoming order indicates long-term commitment to the market and the wide-body order reflects its strong long-haul ambitions.
“(We) expect Vistara’s four Boeing 787 options to be converted to firm orders in the near term and see another larger wide-body order in the next one-two years,” Kaul said.
Kaul expects Vistara to develop a strong regional international network with its narrow-body fleet order.
“Expect to see Airbus A321LRs in the 60 narrow-body order, which includes options and 37 narrow-body aircraft from lessors,” said Kaul.