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Tata announces merger of Vistara with Air India

The Tata group announced the consolidation of its airlines, Vistara and Air India. With this consolidation, Air India shall be India’s leading domestic and international carrier.


“Why fly? Simple. I’m not happy unless there’s some room between me and the ground.” ~ Richard Bach


It has been announced that the Tata group will consolidate its airlines, Vistara and Air India. With a combined fleet of 218 aircraft, Air India will become India's largest international airline and second-largest domestic airline. After this merger, the Air India group will comprise Air India, Vistara, AirAsia India and Air India Express. All airlines are expected to merge by March 2024, pending regulatory approval. SIA will hold a 25.1 per cent stake in the merged entity at an investment of Rs 2,058.5 crore ($250 million) in Air India as part of the transaction.

Tata Sons has been working to consolidate all their airline businesses into one company since the government sold Air India and Air India Express in January this year. Tata group-owned Air India has also signed agreements to have a 100 per cent stake in AirAsia India after the Competition Commission of India approved the proposed acquisition of AirAsia India by Air India earlier this year. Tata Sons currently owns 83.67% of AirAsia India and is expected to acquire the remaining stake from AirAsia Berhad.

Along with this acquisition, the group is already in the process of merging Air India Express and AirAsia India into one entity that will provide low-cost flight options. Likely this merger will be completed by the end of 2023 and the entity will be branded as Air India Express, according to a statement. The consolidation of the two low-cost carriers will be undertaken as part of the restructuring roadmap that is being envisioned for the Tata group’s airline business, Air India said in a statement.

“Tata Sons is one of the most established and respected names in India. Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time. With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market. We will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage.”

In a statement, the CEO and MD of Air India Mr Campbell said Vistara has achieved much over the last eight years. The skills, people, systems and processes that have driven Vistara’s success will complement, strengthen and accelerate Air India’s Vihaan.AI transformation programme. Further, he said the merger will enable the new Air India to more quickly attain the size, reach and quality befitting of a world-class airline proudly representing India around the globe.

“The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline. We are transforming Air India, to provide a great customer experience, every time, for every customer. In the course of its transformation, Air India aims to improve safety, reliability, and on-time performance, as well as expand its network and fleet. The possibility of creating a strong Indian airline offering both full-service and low-cost flights is exciting to us. We would like to thank Singapore Airlines for their continued partnership,” Natarajan Chandrasekaran, Chairman, Tata Sons, was quoted in the statement.


DID YOU KNOW?

In 1948, Air India ran its first-ever international flight from Mumbai to London with 35 passengers. The airline had become the first in Asia to operate flights to the west.

The first logo of Air India, selected by J.R.D. Tata was a centaur.

SUMMARY

Singapore Airlines (SIA) and Tata Sons announced on 29th November 2022 that they have agreed to merge Air India and Vistara. After this merger, the Air India group will comprise Air India, Vistara, AirAsia India and Air India Express. The merger of all airlines is targeted for completion by March 2024, subject to regulatory approvals. There are also talks of merging Air India Express and AirAsia India into one entity that will provide low-cost flight options. This consolidation will make Air India the country's largest international carrier and second-largest domestic carrier commanding over 200 aircrafts. SIA will hold a 25.1% stake in Air India at an investment of Rs. 2,058.5 crores as part of the transaction. In a statement, the CEO and MD of Air India Mr Campbell said, “Vistara has achieved much over the last eight years. The skills, people, systems and processes that have driven Vistara’s success will complement, strengthen and accelerate Air India’s Vihaan.AI transformation programme.” The merger will enable Air India to quickly attain the size, reach and quality befitting of a world-class airline proudly representing India around the globe.















BY:

Mithil Garg

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