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VistaJet Faces Bleak Future with $4.4 Billion Debt

VistaJet Faces Bleak Future with $4.4 Billion Debt and Doubts of Financial Viability
by
May 20, 2023
in Finance News, Marketing, NEWS Malta, Tourism
354

VistaJet, a private jet chartering company that received €4.5 million in Maltese taxpayer funds between 2016 and 2018, finds itself in a precarious financial situation with a staggering $4.4 billion debt, as reported by the Financial Times.

Under the leadership of Swiss billionaire Thomas Flohr, VistaJet secured a lucrative contract with the Malta Tourism Authority in 2016, purportedly for “communication and marketing” services. The company received €1.5 million upfront for each year, totaling €4.5 million, from the Maltese government.

The Financial Times investigation reveals a pattern of increased jet acquisitions by Flohr, reaching a total of 360, resulting in the enormous debt burden of $4.4 billion. This speculative investment strategy has raised concerns among investors and auditors about the company’s future prospects.

EY, an independent auditing firm, scrutinized VistaJet’s financial accounts for 2022 and expressed doubts about the company’s ability to continue operating as a going concern. They noted a “material uncertainty” that casts significant doubt on VistaJet’s sustainability.

Often described as the “Uber for private planes,” VistaJet offers its subscribers worldwide access to private jets with short notice. Its growth strategy hinged on risky acquisitions and substantial expenses aimed at rapidly expanding its fleet through the purchase of Bombardier planes. This move provided a lifeline to the troubled Canadian jet manufacturer during the challenging times of 2016.

Furthermore, VistaJet gained attention in 2017 when it operated a mysterious flight coinciding with Pilatus Bank chairman Seyed Ali Sadr Hasheminejad and risk manager Antoniella Gauci leaving the bank’s premises with suitcases filled with documents. This incident raised eyebrows and added to the company’s controversial reputation.

The revelation of a secret contract in May 2020 shed light on the Maltese government’s payments to VistaJet for marketing services between 2016 and 2018. The contract, orchestrated by then-tourism minister Edward Zammit Lewis, stipulated an upfront payment of €1.5 million annually. However, the Public Accounts Committee (PAC) scrutinizing the contract found little tangible evidence to justify the expenditure of taxpayer funds.

Gavin Gulia, Chairman of the Malta Tourism Authority, signed the questionable contract, while Bryan Azzopardi, the authority’s Financial Controller, claimed no control or authority over the disbursement of funds, stating his inability to challenge these payments. Leslie Vella, MTA’s Deputy CEO, admitted before the PAC that they had never assessed or scrutinized VistaJet’s services, emphasizing that the contract was based solely on trust.

The mounting debt and uncertainties surrounding VistaJet’s financial stability raise concerns about the future of this private jet chartering company. With auditors questioning its ability to continue operations and past controversies casting shadows on its reputation, VistaJet finds itself at a critical juncture.

Source: TheShiftNews.com

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