New Delhi: The rising losses in India’s aviation sector don’t seem to deter new players. After Air Asia launched operations on June 12, Tata-SIA announced it would start flying the Indian skies in October.
The story so far hasn’t been something to write home about: Rs 50,000 crore of accumulated losses, R80,000 crore of debt, rising fuel costs driven up by a depreciating currency and fare wars all the year round. That’s despite a fairly robust 13% compounded growth in passenger volumes between 2003 and 2013.
Nevertheless, the Tata-SIA airline — Vistara, a full-service airline, announced it would begin operations in October, lured by the “immense potential” of the Indian market.
“It is true there are losses, but we prefer to look into the future,” Tata-SIA CEO Phee Teik Yeoh said at the launch on Monday, adding that the airline hoped to fill the vacuum in the upper-end segment of full-service carriers created by the exit of Kingfisher Airlines.
The aviation sector was at the cusp of change with many airports being built. Vistara will be the eighth scheduled domestic airline to join the country’s Rs 95,000-crore market, among the top 10 globally, with six more, a couple of them regional aspirants, waiting for a licence. Vistara will compete directly with full-service players Jet Airways and Air India, both of whom have a low-cost arm.
12/08/14 Financial Express
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The story so far hasn’t been something to write home about: Rs 50,000 crore of accumulated losses, R80,000 crore of debt, rising fuel costs driven up by a depreciating currency and fare wars all the year round. That’s despite a fairly robust 13% compounded growth in passenger volumes between 2003 and 2013.
Nevertheless, the Tata-SIA airline — Vistara, a full-service airline, announced it would begin operations in October, lured by the “immense potential” of the Indian market.
“It is true there are losses, but we prefer to look into the future,” Tata-SIA CEO Phee Teik Yeoh said at the launch on Monday, adding that the airline hoped to fill the vacuum in the upper-end segment of full-service carriers created by the exit of Kingfisher Airlines.
The aviation sector was at the cusp of change with many airports being built. Vistara will be the eighth scheduled domestic airline to join the country’s Rs 95,000-crore market, among the top 10 globally, with six more, a couple of them regional aspirants, waiting for a licence. Vistara will compete directly with full-service players Jet Airways and Air India, both of whom have a low-cost arm.
12/08/14 Financial Express
