One of the questions on the minds of many Vistara loyalists has been the pending merger of the airline with Air India. As was announced earlier this year, Air India and Vistara would merge, with Air India being the surviving brand. Singapore Airlines will remain a financial investor in the merged airline entity Air India Limited and will continue to hold a 25.1% stake in the mothership.

Air India CEO comments on the merger of Air India and Vistara

The Air India – Vistara merger will be a longer process than the merger of Air India Express and AirAsia India. There are reasons for that. Both airlines have already had to give certain assurances or concessions to get the blessings of the Indian competition regulator CCI, which will come to light when the CCI publishes the order.  But they also operate in overlapping jurisdictions in Europe (Germany, France) and Asia (Singapore, UAE, Hong Kong, Thailand, Sri Lanka, etc.), and these regulators would like to have a word as well to see how this impacts aviation in their part of the world.

But there are also Vistara loyalists who want this merger not to happen or for it to be pushed as far as possible as they are concerned that it would impact the service quality of Vistara. My view has always been that while a “legal” merger will be pushed through as soon as possible, within 2024, the airlines will continue to run as is under separate AOCs and with their distinct product offerings for a while as the platform is readied for their eventual merger. In the meantime, Air India will start coordinating more and more with Vistara in terms of schedules over time to ensure there are fewer overlaps, and both airlines will also enter into a codeshare with each other to ensure that they can use the other’s metal to offer it to their customers.

Now, the CMD of Air India has confirmed this. In an interview with various media entities, he said,

The two FSCs are much earlier in the journey. We have received the competition clearance from the authorities, we still have some clearances to obtain from international ones, and we need to go through the NCLT process, but in case of Vistara and Air India it is two quite different airlines that are still evolving, and we will decide when they will come together more fully.

Vistara is a very well-regarded, established airline, and Air India is still in the process of transformation and elevating itself. Ultimately, we will want Air India to be as good or better than Vistara and the future airline to be the best of both but we won’t rush the integration from our operating and public perspective until we feel that Air India has reached the appropriate level.

This indicates that Vistara will continue to exist over time. Even when the airline is fully merged into Air India, it won’t be the case that the Vistara livery will vanish, and 62 aircraft will turn up in Air India’s colours on day one. It will take a long time for the whole process to be completed.

He also mentioned that Air India Express will take on a more significant role in expanding the airline group in India in the coming days.

Bottomline

Vistara loyalists should breathe a sigh of relief since the merger of Vistara and Air India is not happening immediately. The airlines will still need more clearances to go ahead with the union, and when that happens, they will most likely be legally combined into one company with two Air Operator Certificates and operate their products while the long-term merger between the two airlines takes shape.

What do you think of the timelines of the merger of Vistara into Air India?

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