Singapore Airlines' India venture Vistara eyes direct flights to U.S.

Vistara, an Indian full-service airline owned by Tata Group and Singapore Airlines, is considering starting direct flights to the United States as the COVID-19 pandemic increases demand for non-stop travel, a senior executive said on Friday.

While the specific timeframe and aircraft requirements are yet to be finalised, Vistara is studying various scenarios for direct flights, Vinod Kannan, chief commercial officer, told Reuters in an interview.

COVID-19 brought air travel to a grinding halt earlier this year as nations imposed travel bans. While travel has resumed to some extent, passenger numbers remain far below previous levels and a full recovery could take years.

Vistara has seen a rise in demand for non-stop flights, as passengers try to avoid stopovers to reduce the risk of getting infected - a trend it expects will continue in the future.

Flag carrier Air India is the only Indian airline currently offering direct flights to the U.S.

"This means there is definitely an opportunity...to fly direct to the U.S., and it is an opportunity we are looking at," Kannan said.

The airline, which started international flights last year, currently operates two Boeing Co widebody planes and has four more on order but Kannan said the specifications and layout were not suited for direct flights to the United States.

Whether Vistara would look at ordering new planes or leasing them is under discussion.

"In today's situation it is much easier to lease a widebody compared to one year ago. Those opportunities and scenarios are being worked on," Kannan said.

Prior to COVID-19, the airline flew to destinations like Bangkok and Singapore and had plans to start flying to Japan and Europe. Its international flights are now limited to destinations like London and Dubai with which India has a bilateral "air bubble" arrangement to operate direct flights.

It is in talks to start flights to Paris and Frankfurt under the same bilateral agreement, Kannan said.

By mid-2023, Vistara expects 20% to 30% of its total seat capacity to be deployed on international routes, up from less than 10% last year.

It expects to expand its fleet to 70 planes - a mix of Airbus' narrow-body planes and Boeing widebodies - from 47 or 48 planes by the end of the current fiscal year.

While Vistara continues to negotiate with vendors on costs and delays taking delivery of some planes, it is starting to see some recovery in domestic business and leisure travel.

"It has not been an easy year and it will affect my break-even point and push it back," Kannan said.