Consolidation begins ! Air India and Vistara , two of the Tata Group’s airlines are going to get merged, an announcement from Tata group today says so.
Understandably , in the future, Air India will be the only airline brand under the group, with Air India Express as its low-cost arm. Which will mean the Vistara and AirAsia India brands will be dropped.
Statement reads,
With a combined fleet of 218 aircraft , Air India will be the largest international airline in India and the second-largest domestic airline , according to a statement from the group.
With international operations in the Middle East, Asia, and Europe, Vistara a 51-49 joint venture between Tata Sons and Singapore Airlines is a full-service airline. Now, Tata group and Singapore Airlines (SIA) have agreed to the merger.
Post merger, Tatas will own 74.9% of the amalgamated company, while SIA holding will get the remaining 25.1% share.
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Currently, Tatas and SIA hold 51% and 49% stakes in Vistara, respectively. The announced merger is expected to be completed by March 2024, after receiving all necessary clearances.
After receiving all necessary approvals , Vistara and Air India will merge , according to the company . According to the statement, SIA will invest Rs 2,059 crore in Air India as part of the merger transaction.
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On January 27th , 2022, Tata Sons, through its wholly-owned subsidiary Talace Private Limited , had acquired a 100% stake in Air India from Goverment of India.
The Tata Group intends to shape the Air India as an umbrella carrier through the merger. The Tata Group desires AI to serve as the umbrella provider , with a full-service arm formed by combining Vistara and the Maharaja and a low-cost arm formed by combining AirAsia India (AAIPL) and AI Express. This is part of the Tata group’s plan to bring all four airlines under it under a single entity, Air India.
