The Tata Group announced plans to merge its two airlines, Vistara and Air India, in November 2022. Tata Sons and Singapore Airlines Limited (SIA) have a 51:49 joint venture called Vistara.
The merger transaction will proceed once all necessary approvals are obtained. As part of the merger, SIA will invest Rs 2,059 crore in Air India, and after the consolidation, SIA will own 25.1% of Air India. The transaction is scheduled to close in March 2024.
Vistara becomes Air India’s bilateral interline partner
Vistara, a Tata-owned full-service airline, has added Air India as a bilateral interline partner. The collaboration allows passengers to travel on both airlines using a single ticket, including handling check-in and baggage for each other’s passengers. Bags on mixed itineraries may also be transferred from one airline to another.
Tata Group seeks Competition Commission of India approval
Tata Group applied to the Competition Commission of India (CCI) last week for permission to merge Air India and Vistara. Employee integration and other merger-related processes have already begun.
The CCI’s approval is one of several conditions that must be met before Air India and Vistara can merge.
A notice filed with CCI read, “The proposed combination relates to the merger of Tata SIA Airlines Limited (TSAL) into Air India Limited (AIL), Air India being the surviving entity.”
Consolidation of Air India and Vistara expected to improve airline’s competitiveness
The merger of Air India and Vistara is expected to boost the Indian aviation industry’s competitiveness. The merger aims to reduce operational costs, improve operational efficiencies, and expand the consolidated entity’s network. The merged entity will improve passenger services while increasing profitability.