Saturday, November 19, 2016

Vistara may soon get major capital infusion: CEO

According to a report by Tarun Shukla in The Mint, Vistara is hoping to receive its largest equity infusion since inception to fund plans to fly on international routes, said Phee Teik Yeoh, CEO, Vistara.

Tata Sons Ltd holds a 51% stake in Vistara, which was launched in 2015 and Singapore Airlines Ltd (SIA) owns the rest.

The airline started with a cash infusion of about INR 620 crore by its parent firms, who followed up recently by pumping in INR 150 crore more. The airline has authorised share capital of about INR 1,500 crore, according the documents the airline has submitted to the Ministry of Corporate Affairs.

To fly on international routes, which are capital-intensive and initially loss making operations, it needs a war chest to compete with the likes of Air India Ltd, Jet Airways (India) Ltd, Emirates and Deutsche Lufthansa AG, among others.

In a new Civil Aviation Policy earlier this year, the Union Cabinet partly scrapped the so-called 5/20 rule, which restricted overseas operations to only those airlines that had five years of domestic flying experience and a fleet of at least 20 aircraft. The five-year criterion has now been scrapped.

Yeoh said a fresh injection of money would exceed the start-up infusion of INR 620 crore. The size of the infusion would depend upon the board of the airline, which is yet to approve the plan for Vistara to fly on international routes.
18/11/16 Travel Biz Monitor