Vistara extends CEO Phee Teik Yeoh’s term, gets Rs200 crore from promoters
- It’s not about auditions, it’s about emotions: Deepak Dhar
- Sebi strengthens procedures for dividend payment, transfer of securities
- Donald Trump slams Opec as cartel pushes harder for high oil prices
- 2002 Gujarat riots: Maya Kodnani acquitted in Naroda Patiya case
- Sebi fines Suzlon Rs1.1 crore for violating insider trading norms
New Delhi: Vistara, the airline run by Tata SIA Airlines Ltd, has extended the term of its chief executive Phee Teik Yeoh, and received a capital infusion, as it moves towards starting international operations next year.
Phee, whose term has been extended for three years from 15 April, will continue to be on deputation from Singapore Airlines, which owns 49% of Vistara, said a person with knowledge of the matter who did not wish to be named. Tata Sons Ltd holds the remaining 51% in the joint venture.
“One thing you have to give it to him, he has kept the company and its culture together, he will see it through the international operations,” the person said.
Singapore Airlines typically rotates its staff, offering them positions in various departments globally every few years. Phee has also done similar stints earlier.
The decision to retain Phee was taken at a board meeting late last month, where discussions also centred on other administrative issues such as closing the number of board meetings required every fiscal.
A company has to hold a stipulated number of meetings every fiscal as mandated under government rules.
“Things are on track,” the same person said, referring to the airline’s plans of flying abroad next year when it meets the government requirement of a 20-aircraft fleet.
Vistara currently has 13 planes and a 3.1% domestic market share. Phee will be paid about Rs3.69 crore in compensation, an increase from Rs3.06 crore in 2015-2016, according to data with the ministry of company affairs reviewed by Mint.
Vistara declined to comment.
Tata Sons Ltd and Singapore Airlines have also infused another Rs200 crore into the airline, taking the total capital infusion from 2015 onwards to about Rs1,220 crore, which includes a start-up capital of Rs620 crore, followed by tranches of Rs150 crore and Rs250 crore in the past year.
The airline made a loss of Rs400.90 crore on revenue of Rs714.56 crore in 2015-16.
Its loss in the first year 2014-15, during which it had operated only for three months, was Rs199.07 crore on revenue of Rs69.30 crore.
The Rs200-crore infusion shows that a major tranche may still come soon, said an analyst who did not wish to be named.
Phee said in an interview last year that he was waiting for a tranche bigger than Rs620 crore to buy wide body planes.
“It shows that the international operations plans are still not fully finalized. The current funds must be to help with the losses,” the analyst said.
The airline will need about four months to prepare the documents for ordering new planes, said another person with knowledge of the matter, also requesting anonymity.
Vistara may, in the meanwhile, look at leasing planes from Singapore Airlines to fly abroad as new planes take some time to be built and delivered as per bookings.
Vistara will compete with Air India Ltd and Jet Airways Ltd and other foreign airlines when it flies abroad.
In preparation, the airline is already working on an international safety audit, besides building brand awareness for its domestic full-service product, which would be balanced out by international tickets that command a higher premium.
“The earlier they fly abroad, the better for them, the domestic market will drag them down,” the analyst said.