Monday, October 31, 2016

Both Vistara and AirAsia in business to fly high: Tatas

Mumbai: Regardless of Cyrus Mistry’s reservations, the Tata group is confident that its twin aviation bets — with Singapore Airlines (SIA) and Air Asia — are backed by sound business judgement despite losing money on them.

Tata SIA, which runs Vistara Airlines, lost nearly 58 paise for every rupee earned in sales in its first year of operations. The joint venture between Tata Sons and Singapore Airlines posted a net loss of Rs 401 crore on a revenue of Rs 691 crore for the year to March, as per filings with the Registrar of Companies. The Air Asia India joint venture posted a net loss of Rs 19.4 crore with revenue of Rs 180 crore in the quarter ended June, as per its investor presentation.

That’s not unusual early on in this business, said a Tata Group spokesperson. “Aviation is a long-gestation business sector, and it can take several years before profitability is achieved,” the spokesperson said. “Suffice it to say we have a clear road map for profitability in both companies.”
31/10/16 Sagar Malviya & Kala Vijayraghavan/Economic Times