Tata, Singapore Airlines infuse Rs 750 cr in Vistara

Tata Sons and Singapore Airlines that together own premium carrier Vistara have pumped in Rs 750 crore into it. Tata Sons has invested Rs 382.5 crore, while Singapore Airlines has pumped in Rs 367.5 crore, according to data by Tofler.

This is the airline’s fifth round of funding by the owners since April 2020 as Vistara struggles amid the pandemic. This infusion comes at a time when Indian airlines are struggling to stay afloat amid travel restrictions.

Tata Sons and Singapore Airlines had pumped in Rs 465 crore in May, Rs 585 crore in November 2020, Rs 750 crore in July and Rs 200 crore in April. Tata Sons own 51 per cent of the airline, while the remaining 49 per cent is owned by Singapore Airlines.

The airline’s board has approved the allotment of 75 crore shares of Rs 10 each to the two promoters. The airline is yet to make an official announcement on the funding.

However, Vistara’s losses continue to mount. From a loss of Rs 400 crore in FY16, its net loss increased to Rs 1,813 in FY20.

Nevertheless, Tata Sons aims to continue its dominance in the aviation sector. After Vistara and Air Asia India, the conglomerate is also eyeing Air India that the government wants to divest by the end of the year. Tata is reportedly in the lead in the preliminary bidding rounds. The company has been intensifying its due diligence on the deal and is likely to ask for an indemnity clause  to protect itself from unexpected claims or ‘hidden contracts’ later on.

Vistara has a fleet of 47 aircraft including 36 Airbus A320, 2 Boeing 787-9 Dreamliners, 3 Airbus A321neo and 6 Boeing 737-800NG aircraft. It currently serves more than 40 destinations.

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