Air India – Vistara merger by March 2024

In the latest development, the Indian multinational conglomerate, Tata Group has decided to merge Air India and Vistara, major Indian airline companies owned by Tata Sons. Tata Sons Private Limited which is the parent company of Tata Group had earlier taken over control of Air India from the Indian government on January 27, 2022.

Both Air India and Vistara play a major role in the domestic and international airline industry in India. The merger between both airlines is set to be completed by March 2024.

When announcing the merger, N Chandrasekaran, chairman of Tata Sons Private Limited said that the merger between Air India and Vistara is a major milestone in the journey to make Air India a world-class airline. Mr. Chandrasekaran said that Air India is aiming to provide each and every customer with a quality flying experience every time they fly with the airline.

He added that post-merger, the newly formed entity will be working towards growing its routes and fleet which will, in the end, help the airline in revamping its customer proposition, enhancing safety, reliability, and on-time performance.

Following the merger between two major Indian airline companies, Tata Sons will have the majority stake in the combined entity, AI-Vistara-AI Express-AirAsia India Pvt Ltd (AAIPL). Singapore Airlines, which partnered with Tata Sons in 2013 to set up Vistara will have a 25.1 percent stake in the larger Air India Group.

Air India Vistara merger
Air India is one of the largest airline companies in India

Singapore Airlines owned by Temasek Holdings has also decided to invest 2,059 crore rupees into the combined entity in upcoming financial years. Tata Sons will also be injecting additional capital to ensure that the merger is completed without instructions.

Chief Executive Officer of Singapore Airlines, Goh Choon Phong said that the company is feeling positive about the latest decision to merge Vistara Airlines and Air India. He also said that Singapore Airlines will work with Tata Sons to provide quality flying experience to passengers.

As of now, Air India (comprising Air India Express and Air Asia India) and Vistara has a total fleet capacity of 218 aircraft which includes both widebody and narrowbody planes. These airlines currently offer service to 38 international and 52 domestic destinations.

The merger will also make the new Air India entity, the second-largest airline company in India (in terms of passengers), just below IndiGo Airlines.