Air India and Vistara Set to Create India's Largest International Airline
Air India and Vistara Merger Cleared for Takeoff: Tata Group's New Aviation Giant Takes Shape
10 June 2024
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Neelesh Bachani
1. The merger of Tata Sons-owned Air India and Vistara Airlines, approved by the National Company Law Tribunal, aims to integrate staff, resources, and fleets by year-end, forming the largest international carrier and second-largest domestic carrier in India with a combined fleet of 218 aircraft.
2. Singapore Airlines will invest Rs 2,059 crore in the merged entity, holding a 25.1 percent stake, to support Air India's financial strength and growth, highlighting a strategic partnership between Tata Sons and SIA.
3. Air India CEO Campbell Wilson outlines a transformation plan focusing on fleet modernization, including retrofitting over 100 planes and ordering 25,000 aircraft seats, aiming to enhance integration, growth, optimization, and customer experience.
The National Company Law Tribunal has given the green light for the merger between Tata Sons-owned Air India and Vistara Airlines. This approval from the Chandigarh bench paves the way for the two airlines to integrate their staff, resources, and fleets immediately. The merger is anticipated to be finalized by the end of the year. This significant development follows the approval from the Competition Commission of India, which was granted in September of the previous year.
Tata Sons acquired Air India in January 2022, marking a significant milestone in the aviation industry. Vistara Airlines, a joint venture between Tata Sons and Singapore Airlines Limited (SIA), began its operations in 2013. Tata Sons holds the majority stake in Vistara, highlighting its strategic interest in the aviation sector. The Tata Group announced its plan to merge Air India and Vistara in November 2022, aiming to create a more robust airline entity.
The merger is set to make Air India the largest international carrier and the second-largest domestic carrier in India, according to the Tata Group. The combined fleet of the merged entity will boast 218 aircraft, significantly enhancing its operational capacity. This consolidation is expected to bring about synergies to benefit the airline's operational efficiency and market competitiveness.
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Singapore Airlines will invest Rs 2,059 crore in Air India as part of the merger deal. Post-merger, SIA will hold a 25.1 percent stake in Air India, reflecting its continued commitment to the partnership with Tata Sons. This investment is anticipated to bolster Air India's financial position and support its growth plans.
Air India CEO Campbell Wilson emphasized the ongoing transformation at Air India, focusing on integration, growth, optimization, and enhancing customer experience. The airline is in the process of retrofitting over 100 planes, including 40 wide-body aircraft, and has ordered approximately 25,000 aircraft seats to revamp its fleet. These efforts are aimed at modernizing the fleet and improving the overall passenger experience.
Wilson highlighted that the new Air India is distinct from its predecessor, aiming for a revitalized image and operations. He hinted at possible future partnerships and collaborations that could further enhance Air India's market position. The CEO's optimistic outlook indicates that the airline is gearing up for significant changes and improvements, setting the stage for a promising future.
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