Vistara, the joint venture between Tata Group and Singapore Airlines, posted a significant net loss of Rs 1,393 crore for the financial year 2022-23, even as its revenues doubled in comparison to the previous year, the airline said in a regulatory filing with the Ministry of Corporate Affairs.
The full-service carrier, also known as TATA SIA Airlines Limited, witnessed its net loss narrowing by 31.5 per cent from Rs 2,031 crore reported in the last fiscal year, reported Moneycontrol on Tuesday. The loss comes as a surprise as the firm saw a significant boost in its revenues. which have reportedly doubled during the same period. The exacerbated loss appears to underline the challenge in achieving profitability in India’s fiercely competitive aviation sector, which has been severely hit by fluctuating fuel prices, currency depreciation, and operational challenges.
According to the airline, the decrease in net loss was mostly owing to its topline or revenue from operations doubling in 2022-23 compared to Rs 11,784 crore in the previous fiscal year.
Despite the increase in revenue, the airline’s net worth decreased to Rs 502 crore at the end of 2022-23, from Rs 1,250 crore at the end of 2021-22.
Vistara said in a regulatory filing that the Indian aviation industry came back strongly in 2022-23 crossing even pre-Covid levels.
“Domestic demand surged past pre-Covid levels to register more than 4 lakh passengers every day consistently for the last six months,” the airline said.
Earlier this month, Tata Sons said in an annual report that airlines owned by Tata group posted a net loss of Rs 15,530 crore in FY 23. In total, Air India registered a loss of Rs 11,216.32 crore while earning revenue of Rs 37,928.70 crore.
Air India Express, which is Air India’s subsidiary, made a net profit of Rs 116.84 crore while other group airlines – AirAsia India, and Vistara – posted a loss during the last fiscal year. Air Asia India reported a net loss of Rs 2,750 crore against Rs 2,178 crore in FY 22.
“From the date of acquisition, till March 31, 2022, Air India contributed Rs 5,657.7 crore in revenue and Rs 397.2 crore to the loss before tax from continuing operations. The contributed revenue would have been Rs 22,542.12 crore and the loss before tax would have been Rs 9,626.2 crore had the acquisition date been the beginning of the annual reporting period for the year ended March 31, 2022,” the Tata Sons annual report said.
In order to bolster the Tata Group’s position in India’s aviation industry, Vistara – a venture jointly owned by the Tata Group and Singapore Airlines – is set to merge with Air India. If all goes as per the plan, the merger will see the light of the day by April 2024. The deal comes after Air India was acquired by Tata Group in 2022, 69 years after the airline was nationalised by the Indian government.
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