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Vistara hires senior SIA executive as it readies to fly abroad

LiveMint logoLiveMint 01-03-2017 Tarun Shukla

New Delhi: Vistara, the full-service airline run by a joint venture between the Tata group and Singapore Airlines Ltd (SIA), is hiring a senior executive from its partner to help set up its international operations.

Singapore Airlines’ Basil Kwauk, who has more than 20 years’ of experience in flying and operations, is expected to join Vistara around May, a person aware of the development said on condition of anonymity. His exact designation at Vistara could not be ascertained.

“Long-haul flying is their (Singapore Airlines) expertise. So it should not be surprising,” the person said, adding there was no need for Vistara to hire external consultants for advising the company on its international plans because of Singapore Airline’s extensive experience in the field.

Vistara’s chief executive officer Phee Teik Yeoh also worked with Singapore Airlines, which owns 49% in the Indian company, prior to his current assignment. Kwauk will work closely with Yeoh and other senior executives who were brought in 2014 to start Vistara.

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Vistara declined to comment.

The move comes as Vistara is set to present its final plan to fly overseas to the company’s board. The presentation will include issues such as route network planning, economics and plane options, the person said.

The approvals have been running late partly because of the abrupt removal of Tata Sons Ltd chairman Cyrus Mistry in October and the subsequent four-month-long search for the next group chief.

After Vistara’s board approves the mandate, the new Tata Sons chairman, N. Chandrasekaran, will have to sign off on the proposal. Vistara officials have already held introductory meetings with Chandrasekaran after he took over.

Yeoh said in November the infusion of funds into Vistara will exceed the Rs620 crore put in by its investors in the past three years. The airline is estimated to report a loss in 2017-18 too, according to aviation consulting firm CAPA.

Vistara has authorized as hare capital of about Rs1,500 crore, according to documents submitted by the airline to the ministry of corporate affairs.

The airline has a 3% domestic market share with a fleet of 13 Airbus A320 planes. It is expected to complete the mandatory 20-aircraft fleet by next year after which it can fly abroad, competing with Air India Ltd and Jet Airways and other foreign airlines.

In preparation, the airline is conducting an international safety audit and exploring tie-ups with foreign airlines.

Vistara will have to hire and train cabin crew with foreign-language skills, arrange for maintenance and ramp-support abroad (which may include stocking some spare parts) and deal with foreign governments and airports for approvals as it prepares to fly overseas, former Jet Airways CEO Steve Forte said.

“Expanding internationally substantially amplifies an airline’s market base. For every international route it operates, it uses its domestic network as a feeder, giving it more chances to generate new traffic. The benefits for an international operation are many,” the New York-based Forte said.

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