Skift Take
The merger of Vistara and Air India will end the long process of consolidating the web of aviation entities and organizing them into one airline business. This follows a 24-year quest for Singapore Airlines and Tata to co-own Air India.Â
The Air India and Vistara merger has been ongoing for over 20 months and is now in its final phase with an expected completion date of November 12, the airlines announced Friday.
Vistara will soon stop accepting bookings for flights beyond November 11. Customers with existing bookings past then can still travel, but they will be transitioned to Air Indiaâs booking systems, and new flight numbers will be assigned.
Customers may not see much of a change initially. Aircraft with Vistara livery and product will still be flying until it is time for their heavy checks, at which time theyâll presumably be painted into the Air India livery, though thereâs been no official communication about the process. The crew rostering is expected to remain the same, and the two airlines will likely fly under one common brand name but two separate sub-organisations until early 2025.
Most Vistara corporate staff have already been seconded to Air India roles, and the frontline staff, such as pilots and cabin crew, will be transitioned when the merger is completed.
Vistara had already informed members of its frequent flyer program, Club Vistara, about the terms of the merger into Air Indiaâs loyalty program, Flying Returns. The airline will protect the status of their loyal customers for at least a year, and their points will be transferred on a 1-to-1 basis. The date of the merger of the loyalty programs has not yet been announced.
Many customers have not taken this merger very well so far. Vocal customers have also criticized the merger, complaining that the quality of the product and service from Air India is not on par with Vistaraâs offering. However, from a business perspective, Air India is an older brand and is known across the globe, and hence, the legacy won over the short life of Vistara.Â
History of the Merger
In 2022, the Tata Group completed the takeover of Air India, an airline started by JRD Tata in 1932 but later nationalized by the Government of India. Along with Air India came Air India Express, a low-cost subsidiary.
Vistara was launched in 2015, with a 49% equity ownership by Singapore Airlines. This came after many failed attempts to partner earlier.
The Tata and Singapore Airlines relationship goes back decades. In 1997, Tatas proposed the launch of an airline based in India with a 40% equity participation from Singapore Airlines. The Government of India declined this proposal. Subsequently, the two got together to bid for Air India in 2000, but the privatization attempt did not go through because of resistance by Air India staff.
In September 2023, Air India finally received clearance from Indiaâs anti-trust regulator, the Competition Commission of India, to merge the two entities. Singapore Airlines will become a 25.1% shareholder in the merged entity, in exchange for its investment in Vistara, and additional cash infusion into Air India.
