DALLAS — India’s aviation sector is witnessing a significant transformation as the full-service carrier Vistara (UK) bids farewell to its independent existence. After nine years, the airline operated its final flights today, marking the culmination of its merger with Air India (AI).

Starting November 12, Vistara’s ‘UK’ flight designator will be replaced by Air India’s ‘AI’ code, with a transitional ‘2’ added to distinguish former UK flights. In the first month following the merger, approximately 1.15 million customers with pre-existing UK bookings are anticipated to embark on their journeys with the newly unified airline.

Air India has assured passengers that UK's routes, schedules, and in-flight experiences will be preserved, with enhanced support at airports and ticket offices to facilitate the transition.

A New Duopoly Emerges

By consolidating with UK, AI emerges as the sole full-service airline in the nation, while IndiGo (6E), India’s largest low-cost carrier (LCC), continues its expansion by introducing international destinations, a business class, and a loyalty program to enhance its appeal.

Singapore Airlines (SQ), a co-founder of UK in collaboration with the Tata Group, now holds a substantial 25.1% stake in the expanded AI entity. This marks the largest foreign investment ever made in an Indian airline. AI and SQ have also broadened their codeshare agreement to cover 11 Indian cities and 40 international destinations.

With this last consolidation, India’s aviation industry, characterized by remarkable growth and substantial government investment, faces a unique challenge: a duopoly where two major airlines dominate over 90% of the market.

The question is now if SpiceJet (SG), the sixth largest LCC in India by number of domestic passengers carried, and LCC Akasa Air (QP), which holds about 5% of the Indian market, can break this duopoly, leaving the future of competition in the Indian skies at a critical juncture.