Air India and Vistara Complete Historic Merger to Form India’s Largest International Airline

On November 12, Air India, owned by Tata Group, officially merged with Vistara, combining strengths with Singapore Airlines to create an integrated airline that will serve over 1,20,000 passengers daily, connecting more than 90 destinations worldwide. This much-anticipated consolidation, announced in November 2022, concludes within six weeks after Air India Express and AIX Connect’s integration, completing Tata’s vision of a comprehensive aviation ecosystem.

The merger brings Tata Group a robust combination of a full-service carrier and a scalable low-cost carrier, enhancing the Group’s ambition to develop a “world-class global aviation company with an Indian heart.” Vistara, a nearly decade-old joint venture between Tata and Singapore Airlines, made its final journey on November 12 with a last flight from Delhi to Singapore. This unification is a notable advancement in India’s aviation landscape, representing one of the most significant mergers in the industry’s history.

Singapore Airlines (SIA) has contributed an additional ₹3,194.5 crore in funding, underscoring its commitment to the larger entity. The merged airline, operating as Air India, now boasts a fleet of 210 aircraft, offering 5,600 weekly flights across more than 90 international and domestic destinations, as per Air India’s official release.

The new Air India entity will not only accommodate over 1,20,000 passengers daily but will also extend its connectivity to over 800 destinations globally through more than 75 codeshare and interline partnerships. This strategic merger makes Air India the largest international carrier from India and positions it as the second-largest domestic airline.

“Following the merger, Air India Group now operates a combined fleet of 300 aircraft across 55 domestic and 48 international destinations, totaling 312 routes and 8,300 weekly flights, with over 30,000 employees,” Air India stated.

With Vistara’s flight code “UK” phased out, the merged airline will adopt the code “AI2” to represent former Vistara flights, allowing customers to recognize Vistara’s hallmark of service quality. Air India’s restructuring continues as it strives to refine service standards amid ongoing transformations.

Campbell Wilson, Managing Director and CEO of Air India, highlighted, “The merger of Air India and Vistara completes the consolidation and restructuring phase of Air India Group’s post-privatization transformation journey, marking a significant milestone. Over the past two years, teams across the four airlines collaborated closely with stakeholders to ensure a seamless transition of assets, personnel, operations, and, most importantly, customer experiences.”

As an emblem of Indian aviation, the beloved Maharaja symbol will retain a reimagined presence within the merged airline. In addition, approximately 4.5 million Club Vistara accounts have now been transferred to Air India’s newly rebranded frequent flyer program, known as the Maharaja Club.

The merger further streamlined Air India’s operations by consolidating over 4,000 vendor contracts and migrating around 2,70,000 customer bookings. Vistara’s final flight under the “UK” code was the international flight from Delhi to Singapore, while its last domestic flight, UK986, journeyed from Mumbai to Delhi.

Marking a new era, Air India launched its first post-merger flight, AI2286, from Doha to Mumbai, while the domestic debut flight, AI2984, took off from Mumbai to Delhi. Both flights landed at their destinations early on Tuesday morning, symbolizing the beginning of a new chapter.

This consolidation is the second major occurrence of airline mergers in India after the 2006-2007 wave, which included the merger of Indian Airlines with Air India, Air Sahara with Jet Airways, and Air Deccan’s amalgamation with Kingfisher Airlines. Today, the newly merged Air India stands as India’s sole full-service carrier.

In the competitive domestic market, Air India, Vistara, and AIX Connect collectively held a 29% market share in September, according to recent government data. Now as an “associated company” of Singapore Airlines, the combined entity redefines Indian aviation and strengthens Singapore Airlines’ influence in the region. SIA further announced a plan to invest an additional ₹3,194.5 crore in the expanded Air India operation, tapping into SIA Group’s internal funds for this capital injection.

SIA commented, “A lower additional capital injection, expected at around ₹31,945 million (USD 498 million), remains consistent with the projected share allotment. The additional capital injection, unchanged to date, is expected to finalize by November 21, 2024. This funding ensures that SIA’s equity interest will remain at approximately 25.1% in the expanded Air India.”

Reflecting on its transformation journey, Air India emphasized its Vihaan.AI initiative, which has made significant progress. Highlights include an order for over 500 new aircraft and the launch of a USD 400 million interior refurbishment program for its legacy fleet, marking substantial investment into enhancing passenger experience.

Tata Group’s storied legacy in aviation traces back to 1932 when J.R.D. Tata established Tata Airlines. This fledgling airline rebranded as Air India in 1946 and was subsequently nationalized in 1953. Tata Group’s renewed focus on aviation seeks to honor this history while paving the way for a modern, expansive network.