Vistara to Merge with Air India by 2025

Mumbai: The Tata Group is poised to bid farewell to the Vistara brand by the end of 2024, with plans to integrate the airline fully into Air India. This strategic move will result in Tata Group consolidating its airline operations under two primary entities:

Air India and Air India Express. The announcement was made by Tata Group executives on the sidelines of the IATA Annual General Meeting 2024, highlighting the latest developments in the Air India-Vistara merger and the Air India Express-AirAsia India consolidation. “By entering 2025, the Vistara brand will likely cease to exist,” stated a Tata Group executive. This decision coincides with the expiration of Vistara’s Air Operator Certificate (AOC) in December 2024. The integration efforts have already begun, with Air India and Air India Express adjusting their networks in preparation for the merger. Air India is increasing its presence on high-demand routes like Delhi-Dubai and Mumbai-Dubai, catering to corporate travellers, while Air India Express focuses on domestic routes and international connections from Tier-2 and Tier-3 cities.

The National Company Law Tribunal (NCLT) has reserved its order on the Air India-Vistara merger, with a decision expected within the next 30 days. Following the NCLT’s approval, the airlines will start transferring staff and assets and begin informing passengers about the merger. The merger also requires approval from the Department for Promotion of Industry and Internal Trade (DPIIT). Upon completion, Singapore Airlines (SIA) will hold approximately a 25% stake in the merged entity. Both Vistara and Air India Express have recently faced operational disruptions due to unrest among their flying staff, but efforts are underway to normalise operations. Vistara is expected to recover its full network capacity by July-August, currently operating with a minor capacity cut.

Parallel to the full-service carrier merger, the low-cost carrier merger between Air India Express and AirAsia India is also pending NCLT approval, which is anticipated within the next 60 days. Post-approval, merging the AOCs of both airlines will take an additional 4-5 months. The airlines have already unified their boarding passes, airport check-ins, booking portals, and social media platforms. The fleet integration process has commenced, with four Airbus A320neos transferred to Air India Express’s AOC, and two aircraft repainted in the new Air India Express livery. As Tata Group advances its consolidation efforts, the aviation landscape in India is set to witness significant transformation, positioning the conglomerate to better compete in the dynamic airline industry.