Overview of the Merger
On November 11, 2024, Vistara, a notable Indian airline, will operate its last flight under its own brand. This marks a significant transition as Vistara merges into the Air India Group. The merger is a result of strategic acquisitions by the Tata Group, which include the purchase of Air India from the Indian Government in November 2022. Tata Group’s consolidation of its aviation businesses under the Air India brand is seen as a move to strengthen its position in the competitive aviation market.
Starting November 12, 2024, all Vistara flights will be conducted under the Air India banner. However, during an interim period, flights operated using Vistara aircraft will carry a unique two-letter designator as part of Air India. The usual ‘UK’ code of Vistara will be replaced by ‘AI’, preceded by a ‘2’ to distinguish these services.
Impact on Passengers and Operations
In the immediate month following the merger, it is anticipated that approximately 1,150,000 passengers with pre-merger Vistara bookings will experience their journeys under the unified Air India brand. To ensure continuity and ease of transition, Air India has committed to maintaining the same routes, schedules, and in-flight service quality that Vistara’s customers have come to expect. This includes the preservation of in-flight products, services, and crew.
To facilitate this significant transition, Air India is enhancing its customer service capabilities. This includes the establishment of dedicated help desks at major airports across India and downtown ticket offices. These initiatives are aimed at providing seamless support to passengers during the integration phase.
Strategic Benefits and Future Outlook
The merger is not just a consolidation of operations but also a strategic alignment that strengthens Air India’s market positioning. Post-merger, Air India will become the sole full-service carrier in India, a significant milestone given the past competitive pressures from failed airlines like Jet Airways and Kingfisher Airways. Additionally, the growing competition from carriers like IndiGo, which has been expanding its international footprint and service offerings, underscores the timely nature of this merger.
Further bolstering this strategic move, Singapore Airlines, previously a co-owner of Vistara, has decided to increase its investment in Air India, raising its stake to 25.1%. This is the largest foreign investment in an Indian airline since the 2012 liberalization of foreign direct investment in aviation. This increased investment by Singapore Airlines is expected to bring additional expertise and stability to Air India, enhancing its competitive edge both domestically and internationally.
The expanded codeshare agreement between Air India and Singapore Airlines, now covering 11 cities in India and 40 international destinations, is another testament to the strengthened commercial relationship post-merger.