The merger of Vistara Airlines with Air India has come a long way. Now this merger is ready to move forward with the final approval for Foreign Direct Investment (FDI) from Singapore Airlines (SIA).
This approval will allow Singapore Airlines, which held a 49% stake in Vistara, to acquire a 25.1% stake in the merged airline by investing ₹2,059 crore. The Tata Group will hold the remaining 74.9% stake in Air India. According to a Times of India report, all the necessary approvals from regulatory bodies, including the Competition Commission of India and the Directorate General of Civil Aviation, are already in place.
After the government’s FDI clearance, the merged entity is expected to announce the timelines for the merger to passengers, especially those who have booked tickets on Vistara flights after the merger date. These passengers will be informed about the new Air India flight numbers and timings.
Sources told TOI’s Saurabh Sinha that the merger is likely to happen after Diwali, around November 1, to avoid potential disruptions during the peak festive travel season. The period between after Diwali and the onset of winter fog, which usually begins around December 20, is considered an ideal one for mergers. This timing will allow the airline to address any initial merger-related issues before the complications of the winter season set in.
Vistara’s fleet of 70 aircraft will continue to operate under their current livery until they undergo heavy maintenance checks, at which point they will be repainted into Air India’s new livery. Sources suggest that grounding aircraft for complete repaint is not practical, especially since Vistara’s aircraft offer a better cabin product than Air India’s older planes.
The merger process has already seen some major developments, including the transfer of Vistara’s frequent flyer miles to Air India’s loyalty program and the relocation of many Vistara employees to Air India’s new headquarters in Gurgaon. Concerns had been raised about possible downgrades of Vistara passengers, such as those booked in business or premium economy classes, being moved to economy on Air India flights due to limited availability in those classes. However, sources have assured that such incidents will be rare.
Initially, Air India’s management had considered delaying the merger until its fleet was upgraded, maintaining Vistara as a premium product carrier in the meantime. However, this plan was abandoned amid growing concerns from Vistara employees about key positions in the merged airline being filled by Air India executives. As a result, the merger is now set to go ahead before the end of this year, even as Air India’s sweeping transformation remains a work in progress.
