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Austerity is Vistara's mantra to prevent financial crunch

To ensure that it does not nosedive into a financial mess like some of its counterparts, newly-launched airline Vistara is following some strict austerity measures and streamlining its resources from parent companies to ensure minimum expenditure.

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Vistara, a full-service carrier, is a joint venture between Tata group and Singapore Airlines
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To ensure that it does not nosedive into a financial mess like some of its counterparts, newly-launched airline Vistara is following some strict austerity measures and streamlining its resources from parent companies to ensure minimum expenditure.

Vistara, a full service carrier offering direct competition to Air India and Jet airways, was launched last week with the first flight landing at Mumbai airport from Delhi on Friday afternoon. The joint venture between India's iconic Tata group and Singapore airlines was announced in September last year. While Tata Sons hold 51% stakes with an investment of $51 million (Rs 315 crore), Singapore airlines (SIA), the flagship airline of Singapore, owns 49% with an investment of around Rs 303 crore.

In an informal chat, top Vistara executives told dna how they planned and executed their plans with lot of austerity by synergising resources from the Tata group and Singapore Airlines to keep costs at a minimum. Top executives did not even hire secretaries to help in the writing of documents or making traveling arrangements, etc.

Vistara's entry comes at a time when most of the Indian airlines are going through a financial crunch. According to an estimate prepared by leading aviation consultancy company CAPA, Indian airlines may post losses of USD 1.3-1.4 billion in the year 2015, down from USD 1.7 billion in losses last year. Over the past seven years, Indian airlines have lost approximately USD10.6 billion.

"Since it is a start-up, we planned the entire costing right to the last final detail. With no secretaries to assist, we drafted documents and letters on our own," said a senior executive at the airline. "With the airline now in place and expanding, we will surely be requiring personal assistants and secretaries for doing day to day work," he added.

Another senior executive said that for most of the management and administrative work, employees from different companies of Tata had been sourced, while for airline operations, the expertise of Singapore Airlines was evident. "This is helping us streamline costs as a lot of resources have been pooled from each other's assets."
 

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