The stakeholders have approached the Competition Commission of India to seek its approval for the merger
The Air India-Vistara merger is in the process of obtaining one of the key approvals required for the business integration. Tata Sons, Singapore Airlines, Air India, and Vistara have approached India’s anti-trust regulator, the Competition Commission of India (CCI), to seek its approval for the merger of Air India, the former national carrier, and full-service airline Vistara. The CCI is expected to evaluate potential competition threats and other factors before giving its approval.
Currently, the Tata Group fully owns Air India, while Vistara is a joint venture between the Tata Group (holding 51 per cent share) and Singapore Airlines (holding 49 per cent share). After the merger, Singapore Airlines (SIA) has committed to investing $250 million and will own 25.1 per cent of the merged entity.
The CCI will pay close attention to whether the merged entity will have enough competition on key routes. If the CCI has any concerns about certain aspects of the merger, it will prescribe remedial steps to address them.
To aid the CCI in its evaluation, the following relevant markets have been identified: Horizontal overlaps that include domestic and international passenger air transport, air cargo transport services in India, and chartered flight services in India. Vertical relationships include ground handling services at Bengaluru, Delhi, Hyderabad, and Thiruvananthapuram airports.
The CCI’s approval is just one of many requirements for the eventual merger of Air India and Vistara. The integration is expected to be finalised early next year. The Tatas will eventually control a full-service airline, which will be a joint product of Air India and Vistara, and a low-cost carrier, which will be a joint product of AirAsia India and Air India Express.
The merger process is already underway, and employee integration is a significant part of it. All 5,000+ employees of Vistara will be given roles in Air India. Interviews are being conducted for non-flying staff at various levels to assess their suitability for respective roles. The Vistara brand will be discontinued, and the merged entity will retain the Air India identity. However, some aspects of Vistara’s working culture and heritage are expected to be preserved in the merged airline.
The Tata group had announced the consolidation of its airlines, Vistara and Air India, in November 2022. With this consolidation, Air India shall be India’s leading domestic and international carrier with a combined fleet of 218 aircraft, making it India’s largest international carrier and second largest domestic carrier, the official statement had read at the time.
Air India, an airline fully owned by Tata Sons, has been the flag carrier of India. Tata Sons, via its fully owned subsidiary, Talace Private Limited (“Talace”), had acquired 100 per cent stake in Air India on January 27, 2022.
Vistara, a 51:49 Joint Venture between Tata Sons and SIA was established in 2013 and is one of India’s leading full-service carriers with international operations in Middle East, Asia and Europe.
On this occasion in November, N. Chandrasekaran, Chairman, Tata Sons said, “The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline. We are transforming Air India, with the aim of providing great customer experience, every time, for every customer. As part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, enhancing safety, reliability, and on-time performance. We are excited with the opportunity of creating a strong Air India which would offer both full-service and low-cost service across domestic and international routes. We would like to thank Singapore Airlines for their continued partnership.
“The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline. We are excited with the opportunity of creating a strong Air India which would offer both full-service and low-cost service across domestic and international routes. We would like to thank Singapore Airlines for their continued partnership.”
—N. Chandrasekaran, Chairman, Tata Sons
Vistara shall be merged with Air India post receipt of requisite approvals. As part of the merger transaction, SIA shall also invest 2,059 crore in Air India. Post the consolidation, SIA shall hold 25.1 per cent shareholding in Air India, the press release by Tatas had stated.
Goh Choon Phong, Chief Executive Officer, Singapore Airlines, said, “Tata Sons is one of the most established and respected names in India. Our collaboration to set up Vistara in 2013 resulted in a market-leading fullservice carrier, which has won many global accolades in a short time. With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market. We will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage.”
Founded by JRD Tata, since its first flight on October 15, 1932, Air India has an extensive domestic network and has spread its wings beyond to become a major international airline with a network across USA, Canada, UK, Europe, Far-East, South-East Asia, Australia and the Gulf. Air India is a member of Star Alliance, the largest global airline consortium.
After 69 years as a Government-owned enterprise, Air India and Air India Express were welcomed back into the Tata group in January 2022. The present management at Air India is driving the five-year transformation roadmap under the aegis of Vihaan.AI to establish itself as a world-class global airline with an Indian heart. Vihaan.AI is Air India’s transformational roadmap over five years with clear milestones. It will be focusing on dramatically growing both its network and fleet, developing a completely revamped customer proposition, improving reliability and on-time performance. The airline also aims to take a leadership position in technology, sustainability, and innovation, while aggressively investing in the best industry talent. Vihaan.AI is aimed at putting Air India on a path to sustained growth, profitability and market leadership.