Singapore Airlines (SIA) and Tata Sons on Tuesday announced the merger of Air India and Vistara, which is expected to be completed by March 2024. Vistara is a joint venture between Tata Sons and SIA. The airline was established in 2013 and is India’s leading full-service carrier with international operations in the Middle East, Asia, and Europe.
SIA holds a 49 per cent stake in Vistara, while the rest 51 per cent is with Tata. Tata wholly owns Air India, which includes the low-cost carriers Air India Express and AirAsia India.
Tata Group acquired Air India from the government in January this year. Ever since the acquisition, there had been talks of a merger between Air India and Vistara. Today, SIA and Tata Group announced that Air India and Vistara would be merged by March 2024.
Also read: Air India, Vistara to merge; Singapore Airlines, Tata Sons hash out the mega deal
In a detailed note, the SIA explained what both airlines offer each other and how the merger will help the group establish India’s largest international carrier. It said that the combination of Air India and Vistara will bring significant synergies as the former has valuable slots and air traffic rights while the latter has operational capabilities and a customer base.
“Air India has valuable slots and air traffic rights at domestic and international airports that are not available to Vistara. With Vistara widely recognised as India’s leading full-service carrier, Air India will benefit from its operational capabilities, customer base, and a strong focus on customer service and product excellence,” SIA said.
SIA said that Air India (including Air India Express and AirAsia India) and Vistara have a total of 218 wide-bodies and narrowbody aircraft, serving 38 international and 52 domestic destinations.
With the integration, it said, Air India will be the only Indian airline group to operate both full-service and low-cost passenger services. “It can optimise its route network and resource utilisation, be flexible and agile in capturing demand across market segments, and tap on a larger consumer base to strengthen its loyalty programme,” the SIA said.
As part of the merger, the SIA will invest Rs 2,059 crore in Air India. Post the consolidation, it will hold 25.1 per cent shareholding in Air India.
Tata Sons chairman Natarajan Chandrasekaran said the merger of Vistara and Air India was an important milestone in our journey to make Air India a truly world-class airline. He said his group is transforming Air India, with the aim of providing a great customer experience, every time, for every customer.
As part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, and enhancing safety, reliability, and on-time performance, Chandrasekaran added.
“We are excited with the opportunity of creating a strong Air India which would offer both full-service and low-cost services across domestic and international routes. We would like to thank Singapore Airlines for their continued partnership,” he added.
Currently, Vistara has a fleet of 53 aircraft, including 41 Airbus A320, five Airbus A321neo, five Boeing 737-800NG and two Boeing 787-9 Dreamliner aircraft. The airline has flown more than 35 million customers since starting operations.
