The deal for the merger between Vistara and Air India will come into effect today. Vistara would operate its last flight under the "vistara" name today. While from November 12 2024, the two airlines will operate as a singular service under the Air India brand. This merger will bring together Vistara, a joint venture between Tata Group and Singapore Airlines with Air India, which is also owned by Tata Group. Singapore Airlines now owns a 25.1% stake in the Air India. Foreign direct investment form Singapore Airlines for the deal has been approved by the government.
The merger was first announced in November 2022. Vistara which is a joint venture between Tata Group and Singapore Airlines with Air India. Vinod Kannan, Vistara CEO, claimed that the merger would bring passengers more choices, a broader network and better traveling experiences. According to Campbell Wilson, Air India CEO, "The effort at all high levels has been what was made across teams of both airlines to ensure a smooth transition of services, people, and customer service under the Air India". Following the merger of Vistara with Air India, Singapore Airlines (SIA) is set to make an additional investment of ₹3,194.5 crore in Air India. Announcing the merger details, SIA confirmed that its investment includes a 49% stake in Vistara, as well as an infusion of ₹2,058.5 crore in cash, resulting in a 25.1% equity interest in the expanded Air India.
Impact on India's Aviation Industry
Earlier many full-service airlines were operating in India, including Kingfisher and Jet Airways. Vistara came on board in 2015 and it was one of the several new foreign airline joint ventures that were encouraged by the liberalization of foreign direct investment norms in 2012 which allowed foreign airlines to invest up to 49% stake in domestic carriers. It has led to partnerships like Etihad with Jet and the setting up of AirAsia India. Now Air India is the only full-service airline operating in India.
Inputs by Agencies
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