Vistara’s net loss widened to Rs 518 crore in FY 2017 due to rising competition and costs.
The airline’s revenue doubled to Rs 1,390 crore on an annual basis due to increase in capacity and improved loads but loss grew over 29% indicating heightened cost pressure. Net loss in FY16 stood at Rs 400 crore. With losses in successive years, the airline’s net worth is negative by Rs 1,000 crore. The figures are disclosed in Tata Sons annual report of last financial year.
At present, it operates 16 planes and flies to 21 destinations.
Vistara declined to comment on the issue.
“Typically low cost airlines take 3-5 years to break even and for full service years, it takes longer than five years,” aviation consultant Mark Martin said.
“ The increase in loss for Vistara is incremental in nature. Revenue has doubled but losses have not grown in that proportion indicating that the airline has been able to reduce its unit costs. The airline should optimise its costs further as it looks to induct wide body planes and expand aggressively,” Martin added.
The airline is likely to order over 100 planes including a mix of narrow body and wide body jets for its overseas plans and is advancing the induction of 20th aircraft to next March.
The airline recently received Rs 200 crore, its second tranche of funding from the promoters. With this, the total investment by the promoters stands at Rs 1,200 crore. The promoters had originally committed Rs 600 crore funding while setting up the airline in 2013.
Source : business-standard.com