Vistara To Merge With Air India From November 12
NEW DELHI/SINGAPORE, Aug 30: India has cleared Singapore Airline’s Rs 2,058.5-crore foreign direct investment in Air India Group as part of merger of the nearly 10-year-old full service carrier Vistara with Air India, a deal that will create one of the world’s largest airline groups.
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Vistara, a joint venture between Tata Group and Singapore Airlines, will fly into the sunset on November 11 under the merger deal that will see the Singapore carrier owning 25.1 per cent stake in the Air India Group.
On Friday, Singapore Airlines (SIA) said the Indian government has approved its proposed Foreign Direct Investment (FDI) into the enlarged Air India Group as part of the ongoing merger of Air India and Vistara.
The approval marks a significant development towards the completion of the merger, which is expected to be completed by the end of this year, SIA said in a release.
With regulatory approvals in place, Air India CEO and MD Campbell Wilson told the employees on Friday that November 12 has been set as the date for the movement of aircraft and crew of Vistara to Air India.
Loss-making Vistara, which has a fleet of 70 planes and flies to 50 destinations, will be operating the last flight under its brand on November 11. It had a domestic market share of 10 per cent in July.
“Starting 03 September 2024, customers will, progressively, no longer be able to make bookings with Vistara for travel on or after 12 November 2024,” Vistara said in a release.
Thereafter, Vistara aircraft will be operated by Air India and bookings for the routes operated by these planes will be redirected to Air India’s website.
“Vistara will continue to take bookings and operate flights as usual till 11 November 2024,” the release said.
The government’s approval for SIA’s Rs 2,058.5-crore FDI is the last major clearance for the merger that was announced in November 2022.
While announcing the merger in November 2022, SIA said it would be investing Rs 2,058.5 crore in Air India as part of the transaction and overall, the airline would have a 25.1 per cent stake in an enlarged Air India Group with a significant presence in all key market segments.
The merger, which will create one of the biggest airline groups, was approved by the National Company Law Tribunal (NCLT) in June. In March, Singapore’s competition regulator CCCS gave a conditional nod for the proposed deal.
Prior to that in September 2023, the deal received approval from the Competition Commission of India (CCI), subject to certain conditions.
Wilson on Friday said that for Vistara flights on or after November 12, the flight numbers will change to Air India ones, even though in nearly all cases the aircraft, schedule and operating crew will be unchanged until early 2025.
A set of Frequently Asked Questions (FAQs) has also been prepared for passengers to help them with more information amid the merger process.
Wilson also said they are now embarking on the final stretch of the long and complicated merger process. The merger was announced in November 2022.
As part of the merger process, Air India has already started the fitment process for the staff. Loss-making Air India and Vistara, which started flying in January 2015, together have more than 23,000 employees.
In July, sources said that around 600 non-flying staff of Air India and Vistara are likely to be impacted by the merger and efforts will be made to provide job opportunities to the affected employees within Air India group and Tata companies.
“SIA and Tata Sons are firmly committed to supporting the growth and success of the Air India Group, which post-merger will have a significant presence in all key Indian airline market segments (full service, low-cost, international, and domestic).
“This merger will reinforce SIA’s multi-hub strategy, and underscore its long-standing commitment to India through a direct stake in this large and rapidly growing aviation market,” SIA said in the release on Friday.
Vistara CEO Vinod Kannan said the merger is about offering passengers more choice with a larger fleet and a wider network while elevating the overall travel experience.
Currently, the Tatas-owned Air India Group comprises Air India, Air India Express, AIX Connect (formerly AirAsia India) and Vistara. As part of consolidation of Tata Group’s airline business, AIX Connect is in the process of merging with Air India Express.
Air India said the FDI approval is an important milestone that facilitates the merger process between Vistara and the airline, and the broader transformation of the Air India Group. (Agencies)
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