News
Vistara receives capital injection from key investors
October 26th 2018
India’s full-service Vistara has received an INR20 billion (US$270 million) capital injection from its two owners, local conglomerate Tata Group and Singapore Airlines (SIA). Read More »
Tata has provided INR10.2 billion in fresh equity and SIA contributed the remaining funds. Following the transaction, Tata maintains a 51% shareholding in Vistara and the Singaporean carrier holds the balance. The additional cash is expected to be used for the airline’s fleet and network expansion, including B787 long-haul routes.
In July, Vistara signed Letters of Intent for six B787-9s plus four options and 13 A320neo Family jets with seven options. The deal is valued at US$3.1 billion at list prices. The Gurgaon-headquartered carrier will source an additional 37 A320neo Family aircraft - A320neo and A321neo jets –from lessors.
Vistara has chosen CFM International LEAP 1-A engines for the A320neo Family aircraft and GEnx-1B engines for the B787s.
The Airbus aircraft are scheduled for delivery from 2019 to 2023 and the B787s from 2020 to 2021. In June, Vistara accepted its 21st aircraft, an A320neo. The aircraft’s arrival in the fleet made the airline eligible for international operations under India’s antiquated 5/20 Rule.
The 50 A320neo Family aircraft the airline signed for this year will fly the carrier’s expanded medium-haul regional and domestic network. The B787s also will operate on medium and long-haul flights, including India to Europe.
“India’s position as the world’s fastest growing domestic aviation market and its impressive growth in air passenger traffic that has more than doubled in the last decade, makes us confident of our aggressive plans for domestic expansion and international foray. These orders are a landmark step in Vistara’s journey and demonstrate our deep-rooted commitment to contributing to the rise of the Indian aviation industry,” said Vistara CEO, Leslie Thng.
“We are delighted to further deepen our relationship with Airbus and to join hands with Boeing to strengthen our modern and fuel-efficient fleet that will help achieve our thought-through ambitions.”
Vistara has been an all-Airbus carrier since its inception in 2015. Because of this, some industry analysts had predicted the airline would order the A330neo instead of the Dreamliner.
The airline’s fleet is 13 A320ceo and nine A320neo aircraft. Vistara today serves 22 destinations with more than 800 flights a week.
Separately, a report in India’s Business Standard this week suggested Tata Group was evaluating an equity purchase in cash-strapped Jet Airways. The Mumbai-based airline is reportedly on the brink of collapse. The carrier's 24% owner, Etihad Airways, agreed to provide Jet with a US$35 million capital injection in September.
Apart from its 51% shareholding in Vistara, Tata also holds 49% of low-cost AirAsia India.
