Vistara likely to delay plane deliveries this year
GOING LEAN The full-service airline also hopes to return some leased planes
NEWDELHI: Vistara is negotiating with Boeing Co. and Airbus as well as leasing companies to delay deliveries of some of the planes scheduled to arrive this year, a top official at the private airline said, in an attempt to reduce costs as fewer people fly amid the coronavirus pandemic.
The full-service airline, owned by Tata Sons and Singapore Airlines, also hopes to return some of the leased planes even before their lease period expires.
Vistara had planned to receive Boeing 787-9s (Dreamliners), Airbus A320neos during the year, Vinod Kannan, the airline’s chief strategy officer said. “We have taken delivery of our first Boeing 787-9 plane. The second one was supposed to come in March, but this hasn’t happened. Our Airbus A321 planes were also supposed to come from March-april, but this hasn’t happened too. A lot of this is due to logistics issues,” he said.
“So, there is some delay in that front, and this would have a knock-on effect on other deliveries as many aircraft manufacturers had to close down and cut capacity. This is an ongoing discussion with aircraft manufacturers and lessors. We are also reviewing our delivery plans and fleet plans to see whether there is any scope to delay our deliveries, or early lease returns are possible,” Kannan said.
Vistara currently has a 41-plane fleet, including Boeing 737 planes, one Boeing 787-9, and 33 Airbus A320 planes, including 6 older A320ceo planes and 27 A320neo planes. It planned to have 52 planes by March 2021.
“This year, we will return our first batch of Airbus A320ceo planes, about six of them. We took nine Boeing 737 planes, earlier operated by Jet Airways. Out of this, two have already been returned. A third one will be going back some time this year. The remaining six are on shortterm lease. We are also reviewing this to see if there is an opportunity for us to rationalise, and if early return is possible,” Kannan said.
The scheduled delivery of six A320neos for Vistara in FY21 will also depend on increased aircraft production, and crew training for these planes.
“Those deliveries that are supposed to happen at the end of the year, may have to be pushed back,” Kannan said.
Earlier in June, Tata Sons and Singapore Airlines together infused ₹500 crore into Vistara, which will be used to pay for aircraft and working capital requirements, Kannan said.
Vistara, which operated 204 flights to 29 domestic destinations and five international airports before the coronavirus struck, currently flies about 40-50 flights daily to 25 domestic destinations.
“We are currently operating 20-25% of our total capacity. On average, we are seeing 50-60% load factor,” Kannan said.
“On flights that are full, we are able to match fares, but for return flights which are not that full, we are subsidising weaker flights with ones with stronger load factor. From an economic perspective, it’s not ideal because the load factor used to be 80-90% pre-lockdown. But, it’s a positive start,” Kannan said, adding he expects domestic markets to see better demand from July.
“My own gut feeling is that regional (international) travel will start by July-august,” he said, adding that “long haul flights, going to Europe or North Asia, will take more time to resume.”
MUMBAI: The National Company Law Tribunal ( NCLT) has allowed Jet Airways to sell its premises in Bandra Kurla Complex (BKC) to settle ₹360 crore dues of mortgage lender HDFC, clear overseas debt and cover corporate insolvency resolution process costs.
Jet Airways’ insolvency resolution professional Ashish Chhawchharia had moved the NCLT to seek approval to sell its third and fourth floor in Godrej BKC building to clear overseas debt to transfer the title of six aircraft under Export-import Bank of the US to the corporate debtor, which would help in maximising value of the defunct airline.
The insolvency professional had sought permission of the tribunal for the sale of the premises after a resolution was passed at the 10th committee of creditors (COC) meeting held on April 24 with approval of 74.45% votes.
The Principal Bench of NCLT in its order on June 11 granted permission to the grounded airline to sell the premises for utilising the proceeds to settle ₹360 crore dues of HDFC, as against the mortgage lender’s claim of ₹424 crore.
The property is non-core asset of the grounded airlines, which was never used by Jet as part of its airlines business, the order said. The l enders have kept t he reserved price of ₹490 crore for the property, it added.
Auction f or t he s ame i s expected to take place on June 26, according to sources.
The order further said that the US Exim Bank holds a charge over six aircraft, of which cumulative depreciated value is over $200 million.
The cash-strapped airline, which was grounded in April 2019, owes more than ₹8,000 crore to banks, with public sector lenders having significant exposure.