Vistara gets Rs 500-crore fund infusion from Tata Sons, Singapore Airlines

Vistara has received Rs 500-crore fund infusion from its promoters, Tata Sons and Singapore Airlines, at a time when the loss-making airline is making international foray to fill the vacuum caused by Jet Airways’ closure.

The airline’s board approved the allotment of 500 million shares of Rs 10 each to the two promoters earlier this month. The board had in July increased the authorised share capital of the company from Rs 5,000 crore to Rs 12,000 crore. The authorised share capital indicates maximum share capital a company can raise.

A Vistara spokesperson declined to comment on the fundraising, but said the airline continued to grow its operations. “In this financial year, we have scaled our network significantly by more than 50 per cent in the domestic market and have also forayed into international market,” she said.

So far, the two joint venture partners have infused over Rs 4,500 crore in the airline and analysts believe the latest round of funding will make it battle ready for medium haul and long haul operations. 

Vistara, which began operations in January 2015, launched its international operations last month with flights to Bangkok, Dubai, and Singapore. Further international expansion is scheduled in early 2020 when it receives two of its widebody Boeing 787. 

The airline has indicated it would launch flights to London and Tokyo next year. It has already sought traffic rights for London which were allocated to Jet Airways. 

Ameya Joshi, founder of aviation blog NetworkThoughts, said widebody international operations would require a lot of investments and Vistara may even have to acquire slots at London’s Heathrow airport and invest in lounges. This week, the airline announced a tie-up with Panasonic for seat back in-flight entertainment system on its Airbus A321 and Boeing 787 planes. It also plans to make further product enhancements for its proposed widebody routes. 

Vistara losses doubled to Rs 831 crore in 2018-19 amid a tough operating environment. While revenue increased 38 per cent to Rs 3,045 crore in the last financial year, loss widened due to increase in fuel costs.