Air India to operate Vistara planes as FDI nod for merger comes through

Mumbai, Aug 30

Full-service airline Vistara announced on Friday that its aircraft would be operated by Air India from November as the government's FDI approval for the merger between the two airlines has come through.

From September 3, it will not be possible to book with Vistara for travel on or after November 12, according to a statement issued by Vistara.

"All Vistara aircraft thereafter will be operated by Air India and bookings for the routes operated by these aircraft will be redirected to Air India's website," it added.

Singapore Airlines has a 49 per cent stake in Vistara, which is a joint venture with the Tata Group owning a 51 per cent share. The government’s approval was required for the merged entity under the country’s foreign direct investment rules which bar a majority shareholding of a foreign company in the airline business.

The Singapore airline plans to invest up to Rs 5,020 crore ($599 million) after the merger is completed. Singapore Airlines said it expected the merger deal, which Indian and Singaporean regulators have cleared, to be completed by the end of 2024.

The initial date fixed for the merger was March, but this was delayed as clearances were required from regulators and the government.

The plan to merge Vistara with Air India was announced in November 2022, with the aim of creating a stronger airline catering to both domestic and international flights.

India is among the fastest-growing aviation markets in the world and Indian airlines such as low-cost carrier IndiGo and Air India have placed orders for hundreds of new aircraft with Airbus and Boeing. International airlines are also expanding flights to the country.

Air India staff have already been working with Vistara to ensure a smooth transition and look forward to offering an expanded network, more flight options and an improved frequent flyer programme, the airline’s CEO Campbell Wilson said in a statement. Air India has said earlier that the Vistara brand will eventually be phased out after it is merged into Air India.

Singapore Airlines, which is the only foreign airline with a direct stake in an Indian carrier, will hold a 25.1 per cent stake in the merged Air India entity for which it will invest $250 million.

Vistara CEO Vinod Kannan said: “We are immensely grateful to all our customers for their support and patronage over the last 10 years. As we progress further in our growth journey, we want to emphasize that this merger is about offering them more choice with a larger fleet and a wider network, while elevating the overall travel experience. Vistara and Air India are committed to ensuring that this transition is smooth and hassle-free. We are excited about this new phase in our journey and look forward to welcoming our customers again soon – as Air India."