Air India transformation: Vistara Airlines to merge with Air India by 2024
Mumbai/IBNS: Vistara Airlines will be merged with Air India, acquired by Tata Group from the Indian government in January this year.
Tata Group was in discussion with Singapore Airlines to merge Air India with Vistara, where the latter has a stake of 49 percent.
Post the merger, Singapore Airlines will own a 25 percent stake in Air India and infuse Rs 2,000 crore into it.
Tata Group had bought Air India by participating in a disinvestment process for Rs 18,000 crore.
A Singapore Airlines release said the two owners "aim to complete the merger by March 2024, subject to regulatory approvals."
Tata Group’s other carriers—Air India Express and AirAsia India—will be also merged under the Air India brand by 2024.
It will then be India's largest international carrier and second-largest domestic carrier, Tata Sons said.
The merger will take Air India’s fleet size to 218, with its 113 planes, AirAsia India's 28, Vistara's 53, and Air India Express's 24.
Tata Group got full ownership of Air Asia (India) after Malaysia-based AirAsia Aviation Group sold its 16.33 percent equity shares in Air Asia (India) to Air India.
According to media reports, Air India also plans to buy 300 narrow-body jets, one of the largest orders ever in aviation history, which would be delivered gradually.
Earlier, Air India's Chief Executive Officer Campbell Wilson had said that it aims to triple its fleet of 113 over the next five years.
"As part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, enhancing safety, reliability, and on-time performance," the company release quoted Tata Sons chairperson N Chandrasekaran as saying.
Goh Choon Phong, the chief executive of Singapore Airlines, said, "Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time. With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India's aviation market."
Air India was founded by JRD Tata in 1932 under the name Tata Airlines. In 1953, the government took over the controls of Air India to run it as the national carrier.
Air India's acquisition by the Tata Group, earlier this year, was hailed as the carrier's homecoming.