The long-awaited merger between Air India and fellow Indian carrier Vistara has finally cleared the last remaining hurdle to receiving regulatory approval from the Indian government.
On August 29, 2024, the government approved an investment of $276 million by Singapore Airlines in the merged entity, paving the way for the final pieces of the deal to fall into place. The Singaporean national carrier, currently joint owner of Vistara alongside the Tata Group, will hold a stake of around 25.1% in the combined Air India Group.
The merger will see the fleets, crews, and route networks of Air India and Vistara being combined, creating the country’s second-largest carrier after IndiGo (InterGlobe Aviation). According to a filing by Singapore Airlines, it is planned that the integration should be finalized by the end of 2024.
In a statement issued following the announcement, the airline said that its planes will all operate under the Air India brand as of November 2024. From September 3, 2024, it will not be possible to book with Vistara for travel on dates on or after November 12, 2024.
“All Vistara aircraft thereafter will be operated by Air India and bookings for the routes operated by these aircraft will be redirected to Air India’s website,” the carrier added.
Singapore Airlines’ shareholding in the new entity will allow the carrier to tap into the burgeoning Indian airline industry, one of the fastest-growing air travel markets globally. It will also increase the company’s spread into new territories, hence the decreasing dependence on its Asian homegrown market. The deal also adds to Singapore Airlines’ growing portfolio of global airline partnerships. Tie-ups in recent years have seen the carrier collaborate with partners such as Garuda Indonesia, and more recently, Malaysia Airlines.
India’s Tata Group, which also includes low-cost carriers Air India Express and AirAsia India, has big expansion plans for the newly enlarged carrier, as it accepts new aircraft into its fleet and expands its global reach. Tata took over Air India in 2022 and commenced a multimillion-dollar transformation program of the former state-run airline, including new aircraft, routes, and a modernized corporate image.
With rival IndiGo planning to commence long-haul services with new Airbus A350 aircraft in the future, Air India is keen not to lose ground against its much younger rival.
In its current form, Air India operates a fleet of 144 aircraft with a further 476 to be delivered, while Vistara operates 70 planes. Air India Express has 64 aircraft with a further 28 on order and AirAsia India has a fleet of 24 narrowbody A320s.
