Another year, another loss for Vistara. It has been 10 years that Vistara, a startup airline formed by TATA Group and Singapore International Airlines (SIA) has been running in red. Out of 40 quarters, the airline has reported profit in only 1 quarter.
Vistara Last year loss
In FY 23, the TATA-SIA Joint Venture airline reported losses worth Rs 1,393 crore. The losses have came down with respect to last year but revenue has doubled. In FY23, the airline reported a revenue of Rs 11,784 crore.
In FY 22, the airline reported a revenue of Rs 5,226 crore. It reported losses worth Rs 2,031 crore in FY22. The airline’s net worth has been reduced to Rs 501 crore. Expenditures increased to Rs 13,890.7 crore.
In FY23, the airline added many aircraft including deliveries of 2 Dreamliner jets. It hired a total of 2,100 employees.
Agreement with Air India Express
During the board meeting to discuss finances of the airline, it said that it has entered into a sub-leasing agreement with Air India Express for a tenure of four years. The agreement occured between lessor, Air India Express and Vistara. In this, Vistara has leased an aircraft to Air India Express, which was leased to Vistara by a lessor. Most probably, this agreement is referring to the transfer of 2 Boeing 737-800 aircraft from Vistara to Air India Express. These aircraft were leased by BOC Aviation. Currently, Air India Express is flying these jets without any livery.
The tenure of the lease is four years and Vistara will be charging 4% of rental payments to Air India Express.
CEO salary to go up
Vistara is running into losses for last 10 years. Chief Executive Officer Vinod Kannan is all set to get a boost in his remuneration. The Board of Directors have approved the recommendation to increase his remuneration to Rs 4.96 crore per annum (S$812,000). The board made sure that his reimbursement for the rest of the term does not cross Rs 12.2 crore (S$2,000,000) per annum.
In short, Vistara CEO will make more in 1 year than the profits registered by Vistara in last 10 years. Meanwhile, pilot salaries in Indian aviation remains the same since a decade.
Source Credits : The Hindu Business Line