Air India-Vistara merger completed: Tata-group airline becomes India’s largest international carrier; here’s how | Company Business News

Air India on Tuesday completed the Vistara merger to create an integrated airline, partly owned by Singapore Airlines, that will be flying over 1,20,000 passengers daily and connect more than 90 destinations.

The completion of the much-awaited amalgamation, which was announced in November 2022, comes within six weeks of the integration of Air India Express and AIX Connect. The two mergers have created a full service carrier and a low-cost carrier of scale for the Tata Group, which is seeking to establish a “world class global aviation company with an Indian heart”.

Earlier in the day, the nearly 10-year-old Vistara — a joint venture between Tatas and Singapore Airlines — flew into the sunset and its last flight was from Delhi to Singapore. The merger marks a significant consolidation in the Indian aviation space.

As part of the merger, Singapore Airlines (SIA) will invest an additional ₹3,194.5 crore in the enlarged entity.

The enlarged Air India will operate over 5,600 weekly flights, connecting more than 90 domestic and international destinations with a fleet of 210 aircraft, according to an Air India release.

Also, the new entity will fly over 1,20,000 passengers every day and offers an extended worldwide connectivity to over 800 destinations through more than 75 codeshare and interline partners.

It is now the country’s largest international carrier and the second-largest domestic carrier.

“Post-merger, Air India Group operates a combined fleet of 300 aircraft covering 55 domestic and 48 international destinations, with 312 routes and 8,300 flights per week. The collective staff strength stands at over 30,000,” the release said.

While the Vistara flight code ‘UK’ has faded away, the airline’s flights will have the code starting with the prefix ‘AI2’ to help customers choose at the time of booking as Vistara was well regarded for its services whereas Air India, which is in the transformation phase, has been grappling with some service issues.

“The merger of Air India and Vistara completes the consolidation and restructuring phase of the Air India Group’s post-privatisation transformation journey, and is thus a significant milestone. Over the past two years, teams across the four airlines have worked closely together and with other stakeholders to ensure that the transition of people, assets, operations and, most importantly, customers, was as seamless as possible,” Air India Managing Director and Chief Executive Officer Campbell Wilson said.

The iconic ‘Maharaja’, once synonymous with Air India for a long time, will remain in a different form in the merged entity. Around 4.5 million Club Vistara frequent flyer accounts have been transferred to Air India’s flying returns programme, which has been renamed as ‘Maharaja Club’.

Amongst many other aspects, Air India said more than 4,000 vendor contracts have been consolidated and 2,70,000 customer bookings migrated.

UK115 flight from Delhi to Singapore was the last flight of Vistara with the code ‘UK’ while UK986 from Mumbai to Delhi was the carrier’s last domestic flight.

Starting a new chapter, the merged entity operated its first flight with the code ‘AI2286’ from Doha to Mumbai.

In the domestic sector, the integrated entity’s first flight AI2984 took off from Mumbai to Delhi. All the four flights landed at their respective destinations early in the morning on Tuesday.

The Air India-Vistara merger also marks the second major airline industry consolidation in the country after 2006-2007. Now, Air India is the lone full service Indian carrier.

In 2006-07, Indian Airlines merged with Air India and Air Sahara merged with Jet Airways. During the same period, Air Deccan was amalgamated with Kingfisher Airlines.

Air India, Vistara, and AIX Connect together had a domestic market share of little over 29 per cent in September, as per latest official data.

Singapore Airlines (SIA) said the merger has been completed and Air India will be an associated company of the airline, adding that it will invest an additional ₹3,194.5 crore in the enlarged entity.

The airline intends to fund the cash amount for the additional capital injection by way of SIA Group’s internal cash resources.

“A lower additional capital injection amount, expected at about ₹31,945 million (equivalent to approximately USD 498 million). The expected additional capital injection amount remains unchanged to date, based on the current targeted share allotment and issuance date of November 21, 2024.

“There will be no change to SIA’s equity interest of about 25.1 per cent in the enlarged AI, arising from the lower additional capital injection amount,” it said in a filing to the Singapore Stock Exchange.

Mentioning about the transformation journey, Air India said Vihaan.AI programme has seen commitment to more than 500 new aircraft and the commencement of a USD 400 million interior retrofit programme for legacy aircraft, among others.

Tatas has a long association with the airlines industry dating back to the 1930s. Jehangir Ratanji Dadabhoy (JRD) Tata founded an airline in 1932 and named it Tata Airlines. In 1946, the aviation division of Tata Sons was listed as Air India and in 1953, Air India was nationalised.