Air India Set to Take Over Vistara Operations

DALLAS — As the merger between Air India (AI) and Vistara (UK) moves forward, the Indian government has granted key approval, allowing AI to begin operating UK flights in November. The final UK flight is scheduled for November 11, with all subsequent flights managed by AI.

Singapore Airlines (SQ), which holds a 49% stake in UK through a joint venture with India's Tata Group, has secured foreign direct investment approval for the expanded AI.

This marks a milestone in the merger process, aiming to create a dominant full-service airline in domestic and international markets. The merger will also bolster AI's network, flight options, and frequent flyer program as the two airlines integrate their operations.

Initially announced in November 2022, the merger is expected to be completed by the end of 2024, a delay from the original target of March 2024. As part of the transition, UK's flight bookings for travel on or after November 12 will be redirected to AI's website. The Vistara brand is set to be phased out following the merger.

Singapore Airlines will hold a 25.1% stake in the combined Air India group in exchange for a US$250 million investment, with an additional investment of up to 50.2 billion Indian rupees (approximately US$599 million) expected post-merger.

Vistara's Growth

SQ holds 49% of Vistara shares, while the Tata Group has the majority 49% share. The pair created the airline in 2013 to launch a full-service, scheduled airline in India to compete with the nation's troubled flag carrier.

Since its inaugural flight on January 9, 2015, UK has grown to operate a fleet of 54 aircraft on a network serving 43 destinations across 12 countries.

The combined carriers would form a strong competitor to India's largest airline Indigo (6E). SQ said that India had a strong domestic and international market, one which is expected to double over the next ten years.

Tata Group, whose predecessors had created the airline back in 1932, took control of troubled AI back in January 2022. the airline had raked up losses of more than US$9.5 billion. AI called the deal a "brand new chapter" in its history. "Two iconic names come together to embark on a voyage of excellence," it said in a statement.

Since then, there has been much discussion of AI's and the UK's future. Both competed directly in several markets. Closer cooperation was already on the cards. What comes is a full take over of UK's operations.