Vistara to merge with Air India

Aviation Updates Philippines – Indian conglomerate Tata Sons will be merging two its airlines - Air India and Vistara - further strengthening its presence in the country's air travel market. 

Image: Vistara Boeing 787 Dreamliner (Credit: Boeing/Vistara)

As part of the merger, Singapore Airlines – a joint venture partner of Tata Sons for Vistara – will invest Rs 2058 crore (~USD $250 million) and get a 25.1% stake in the combined, enlarged Air India Group. Subject to regulatory approvals, the merger is expected to be completed by March 2024.

According to Singapore Airlines, the airline group intends to fund its investment with its internal cash resources. Both Singapore Airlines and Tata Sons also agreed to participate in additional capital injections, if required to fund the growth and operations of Air India.

“The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline. We are transforming Air India, with the aim of providing great customer experience, every time, for every customer,” said Natarajan Chandrasekaran, Chairman, Tata Sons.

Regarding the role of Singapore Airlines with Tata Sons and Air India, Singapore Airlines CEO Go Choon Phong added: “We will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage.”

Formed in 2013, Vistara is a joint venture between Tata Sons (50%) and Singapore Airlines (49%).

The merger of Air India and Vistara is the second move of consolidation of airlines under Tata Sons which includes Air India, Air India Express, Vistara, and AirAsia India.

In November, AirAsia announced it sold its remaining shares of AirAsia India to Air India. The budget carrier is expected to be merged into Air India Express.