Vistara promoters pump capital of over Rs 4,000 cr into airline over 12 months as it prepares for overseas operations
The fund infusion of Rs 4,020 crore has taken Vistara's paid-up capital to Rs 5,640 crore. The fund infusion came following the shrinking operations of some of the airlines
The capital will be used to augment Vistara’s fleet, increase routes globally and attain earlier break-even
Last week, Vistara said it leased six aircraft from Singapore-based BOC Aviation to boost its domestic growth
Vistara leased four Boeing 737-800 NG aircraft to be delivered in May 2019 and two Airbus A320neo powered by CFM LEAP 1A engines
Promoters of Vistara, Tata Sons Ltd and Singapore Airlines Ltd, have reportedly infused total fund of over Rs 4,000 crore into the airline in the 12 months till April 2019, a media report said.
According to Mint, the fund infusion of Rs 4,020 crore has taken Vistara's paid-up capital to Rs 5,640 crore. The fund infusion came following the shrinking operations of some of the airlines, a source familiar with the matter told the newspaper. The capital will be used to augment Vistara’s fleet, increase routes globally and attain earlier break-even, the source added.
Last week, Vistara said it leased six aircraft from Singapore-based BOC Aviation to boost its domestic growth and would deploy them to meet the "sudden drop" in capacity in the market.
Vistara leased four Boeing 737-800 NG aircraft to be delivered in May 2019 and two Airbus A320neo powered by CFM LEAP 1A engines, scheduled for delivery in the second half of 2019.
At present, the full-service carrier connects 24 destinations, operates over 850 flights a week served by a fleet of 22 Airbus A320 aircraft.
The airline recruited nearly 500 former employees of Jet Airways, including pilots, cabin crew, engineers and other staff to support the next phase of expansion of its domestic operations.
Due to acute lack of funds, Jet Airways suspended its operations on 17 April, leaving more than 20,000 employees in the lurch.
In March, Civil Aviation Secretary PS Kharola said Vistara has been given permission to operate international flights.
Vistara's relationship with BOC Aviation dates back to 2014 when the airline announced to lease its first 20 Airbus A320 family aircraft.
Last year, for its domestic, short-haul and medium-haul international operations, Vistara placed an aircraft order of a combination of purchased and leased aircraft totalling 50 from the Airbus A320neo family (including the A321neo), with deliveries scheduled between 2019 and 2023.
Additionally, the airline has purchased six Boeing 787-9 Dreamliner aircraft that are to be delivered between 2020 and 2021 and will be used for long-haul international operations.
While Vistara has 5.17 percent share in the domestic passenger market, low-cost carrier IndiGo has solidified its position as the leader with a 49.9 percent share, according to the monthly traffic data released by DGCA.
On 21 May, Vistara said Vinod Kannan would take over as its chief strategy officer from June as the full-service carrier prepares to fly overseas. Kannan has been working as a chief commercial officer at Scoot, a subsidiary of Singapore Airlines (SIA) group, since October 2017.
"As Vistara accelerates its growth and prepares to take the next leap in its journey of becoming a global brand, certain changes have been introduced in the leadership structure," an airline spokesperson told PTI.
With PTI inputs
The joint venture carrier, in which Tata Sons holds 51 percent stake while the rest is held by Singapore Airlines, currently operates 317 services per week with a fleet of nine Airbus A320 planes.
Paving the way for launch of its flights, Tata-Singapore Airlines joint venture airline Vistara was today granted flying permit by aviation regulator DGCA, almost nine months after it applied for the licence.
This shareholding rejig could also be a welcome move though, since it removes ambiguity and will perhaps bring in more promoter focus