The formal discussions regarding this are expected to begin soon.
The Tata Group's airline Vistara is planning to acquire 16 of Jet Airways' grounded planes that include 10 Boeing 777 aircraft. The update comes a month after Jet shut down its operations indefinitely giving in to financial distress, Business Standard reported.
Jet Airways' wings are clipped, and the Tata Group wants to take this chance to promote its aviation business further. It also plans to add to its fleet three of Jet Airways' single-aisle Boeing 737 planes, along with some Airbus A330 wide-body aircraft. The formal discussions regarding this are expected to begin soon.
Moneycontrol could not independently verify the news.
Vistara has had its eye on international flights to Europe and North America for a while. This boost to its fleet will give these plans a much-needed push. These long haul flights are a complete change in strategy for Vistara, which was earlier planning shorter international routes in the rage of 5-6 hours. It was going to enter mid-range and long-range flights gradually. For the same, it ordered six Boeing 787 Dreamliners to be inducted from January 2020.
Sources said that the carrier was optimistic on the opportunities of direct flights between India and Europe. Jet had flights to Europe before it shut down, so does Air India.
"When the first tranche wide-body order was placed, it was deliberately kept small as there was a scarcity of slots and parking bays. Things have changed dramatically with Jet's fall. With Air India's perennial financial crisis, Vistara can fill the space of long haul carrier," a source said.
The person added that Vistara tried to get the 787 carriers a bit earlier, but Boeing was not able to deliver. Because of this, the airline had to look at 346-seater 777s with a three-class configuration.
Jet Airways owes the US-based Export and Import Bank (EXIM) for its 10 777 jets. After Jet was unable to pay the dues to the bank, it was going to repossess the planes, but lenders to Jet Airways wished to increase their collateral. Therefore, they decided to pay the dues to EXIM Bank to own the planes.
"Most of the loan has been paid by Jet Airways. Banks will repay the remaining amount of Rs 400 crore to get control of Jet Airways' aircraft. The value of the aircraft is much higher, thus increasing the collateral for the Indian lenders," a banking executive told the paper.
These aircraft come with trained pilots and a readied crew, which means Vistara can put it to use immediately. The carrier is also planning to recruit some trained pilots and cabin crew, who previously were with Jet Airways, to save time.In this ambitious expansion plan of Vistara, the only possible hurdle will be the rising fuel costs. Cash will burn much faster as operations on international routes begin.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.