Losses mount for Tata group aviation firms

Rajesh Kurup Mumbai | Updated on October 23, 2019

AirAsia, Vistara report loss of ₹670 crore and ₹830 crore respectively for FY19


The losses of Tata Group’s aviation firms increased in the financial year 2019, with AirAsia India’s net loss widening four times and that of Tata SIA (operating as Vistara) nearly doubling from the year-ago period.

AirAsia India, in which Tata Sons holds a 51 per cent stake, posted a net loss of ₹670.93 crore for the fiscal ended March 31, , compared with ₹124.11 crore recorded during the year-ago period.

The company’s total income rose 39.57 per cent to ₹2,539.06 crore from ₹1,819.15 crore during the previous financial year, according to data filed with the Registrar of Companies (RoC).

The low-cost carrier’s employee benefit expenses rose by ₹82.84 crore while operating expenses rose by ₹1,126 crore. The firm’s book also showed borrowings of ₹100 crore in FY19, while total liabilities rose 84 per cent to ₹703 crore.

Capital infusion

The total capital infusion into the company during the reporting year was at ₹607 crore, of which Tata Sons had infused ₹307 crore, the RoC data showed.

Tata Sons bought a total of 2 per cent stake from R Venkataramanan (managing trustee of Tata Trusts, who quit in February this year) and S Ramadorai (former CEO and MD of Tata Consultancy Services) in December 2018. Post the buy, Tata Sons holds 51 per cent stake in AirAsia India, while AirAsia Investment holds the remaining 49 per cent stake. In April, shareholders infused ₹500 crore in the company and also promised additional capital to meet financial liabilities for up to 12 months.

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Tata SIA Airlines (operating as Vistara) posted a net loss of ₹830.80 crore for the year ended March 31, nearly double that of ₹419.63 crore recorded during the year-ago period. The company’s employee benefit expenses rose by ₹119 crore and fuel and power costs by ₹478 crore, according to RoC data.

The full-service carrier, in which Tatas hold a 51 per cent stake and the remaining 49 per cent is held by Singapore Airlines, posted a total income of ₹3,045.54 crore. This is a 38.34 per cent rise from ₹2,201.41 crore posted during the same period a year ago.

While the company’s accumulated losses rose to ₹2,364 crore, borrowings went up by ₹152 crore and total liabilities rose by ₹330 crore, the data showed.

Total capital infusion during the year stood at ₹2,200 crore, of which Tata Sons infused ₹1,122 crore.

Tata Sons and Vistara declined to comment. AirAsia did not respond to an e-mail query.

Published on October 22, 2019

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