Air India, Singapore Airlines announce successful completion of Air India-Vistara merger | Business News
Tata group’s flagship airline Air India on Tuesday announced the completion of the operational integration and legal merger between Vistara and itself, which was a joint venture between the Tata group and Singapore Airlines. The wheels for the merger were set in motion in 2022 after the Tata group acquired Air India from the government.
Singapore Airlines separately announced that after the merger, it now holds 25.1 per cent stake in the expanded Air India. It held 49 per cent stake in Vistara.
According to Air India, the merger with Vistara has created a full-service carrier of scale and marks a significant milestone in Air India’s post-privatisation transformation journey. This merger follows the merger of the group’s low-cost airlines Air India Express and AIX Connect (formerly Air Asia India), which took effect on October 1.
“The consolidation of the four Tata-owned airlines into one Group operating one full-service and one low-cost airline is part of the ongoing, five-year transformation program, Vihaan.AI, which is focussed on establishing Air India Group as a world-class global aviation company with an Indian heart,” Air India said.
The unified Air India group now operates over 8,300 weekly flights on 312 routes, connecting more than 100 domestic and international destinations with a fleet of 300 aircraft.
With the Vistara-Air India merger taking effect, the expanded full-service airline now operates over 5,600 weekly flights and connects more than 90 domestic and international destinations with a fleet of 208 aircraft.
“The airline will now be flying over 120,000 passengers every day and offers an extended worldwide connectivity to over 800 destinations through more than 75 codeshare and interline partners,” Air India said.
Story continues below this ad
Preparation for the merger started over two years ago and has seen the induction of more than 6,000 staff from Vistara into a new organisation structure. The merger preparation also involved harmonisation of operating procedures across the four airlines, and alignment of over 140 IT systems.
The merger also involved consolidation of more than 4,000 vendor contracts, migration of 2.7 customer bookings, and transfer of 45 lakh million Club Vistara frequent flyer accounts inducted to Air India’s recently-redesigned frequent flyer programme–Maharaja Club.
“Given the unprecedented nature and complexity of the parallel mergers, which coincide with the Group’s significant expansion and transformation programs, close contact was maintained with India’s Directorate General of Civil Aviation (DGCA) which supported and monitored the process throughout. The merger also received support from the Ministry of Civil Aviation (MoCA), Bureau of Civil Aviation Security (BCAS) and other key stakeholders, including multiple international regulators,” Air India said.
“The merger of Air India and Vistara completes the consolidation and restructuring phase of the Air India Group’s post-privatisation transformation journey, and is thus a significant milestone. Over the past two years, teams across the four airlines have worked closely together and with other stakeholders to ensure that the transition of people, assets, operations and, most importantly, customers, was as seamless as possible,” Air India’s Managing Director and CEO Campbell Wilson said.
Story continues below this ad
With Air India being a much older airline and its brand having greater recall value globally, it was decided to retain the Air India brand and retire the Vistara brand for the merged airline.
But the announcement of the merger brought with it concerns for consumers about Vistara’s product and service quality after the merger with Air India. Under government control, Air India was under financial stress, and this reflected in its product and service quality, which was seen as below the standards expected from a full-service carrier. While the now-privatised airline has undertaken a mammoth fleet modernisation and expansion plan, it still has a large number of legacy aircraft that are in a rundown state.
Perhaps that is one of the reasons why the Air India group has decided to keep the “Vistara experience” unchanged for consumers in the initial months of the merger. All existing Vistara flights will continue to be operated using Vistara’s existing fleet of aircraft and by the existing Vistara crew, although the flight numbers will change to those of Air India. The standard Vistara has set will certainly be the benchmark for the new and enlarged Air India.
