Singapore Airlines invests more than SG$ 100 m in Vistara
A Monitor Desk Report 13 May, 2017 | 2602 Views|-+
Singapore: Singapore Airlines has invested more than SG $100 million in Indian carrier Vistara, twice the amount initially planned, reports a local daily.
The airline is 'encouraged' by Vistara's performance so far but an SIA spokesman declined to confirm funding details, citing commercial confidentiality.
Profits are not expected until 2020 at the earliest but the New Delhi-based carrier, which has been flying domestically for more than two years, is growing steadily, the Singapore daily cited analysts as saying.
In June next year, the 49% SIA owned Vistara will collect its 20th aircraft, a significant milestone which will pave the way for the airline to operate international flights.
Tata Group owns the rest 51% stake in joint venture airline. Under Indian civil aviation rules, Vistara must have at least 20 planes before it can fly outside the country.
The launch of international flights is a key part of SIA's strategy to expand its own reach and reduce the dominance of Middle Eastern carriers which have a strong hold on the growing India-Europe and India-United States markets.
When SIA and Tata first announced in 2013 the intention to launch Vistara, the plan was for a joint US $100 million investment.
The financing has since more than doubled on the back of high operating costs in India, stiff competition from other Indian carriers that has prompted steep fare cuts, and costs associated with plans to go international, reports out of India have suggested.
"The airline currently has 13 aircrafts serving 45 domestic routes," a Vistara spokesman said.