Saturday, August 24, 2024 The Vistara-Air India merger is moving forward, with FDI approval expected soon, and plans to finalize the merger after Diwali. The eagerly awaited merger of Vistara into Air India is poised to progress, with final approval for foreign direct investment (FDI) from Singapore Airlines (SIA) anticipated as early as Saturday. This approval will enable SIA, previously holding a 49% stake in Vistara, to secure a 25.
1% share in the merged airline by investing ₹2,059 crore. The Tata Group will retain the remaining 74.9% stake in Air India.
As reported by TOI, all necessary regulatory approvals, including those from the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA), have already been obtained. Once the government grants FDI clearance, the merged airline is expected to announce specific merger timelines to its passengers, particularly those who have booked Vistara flights beyond the merger date. These passengers will receive updates on new Air India flight numbers and schedules.
Sources have informed TOI’s Saurabh Sinha that the merger is likely to occur after Diwali, around November 1, to minimize disruptions during the peak festive travel season. The period following Diwali up until the onset of winter fog, typically around December 20, is considered optimal for the merger, allowing the airline to resolve any initial issues before facing the additional challenges of winter weather conditions. Vistara’s fleet of 70 aircraft will continue to fly under its current livery until they are scheduled for heavy maintenance checks, at which time they will be repainted in Air India’s new colors.
Sources indicate that grounding aircraft solely for repainting is impractical, especially given that Vistara’s planes feature a more advanced cabin product compared to the older aircraft currently operated by Air India. The merger process has already seen significant progress, such as the integration of Vistara’s frequent flyer miles into Air India’s loyalty program and the relocation of several Vistara employees to Air India’s new headquarters in Gurgaon. Concerns had been raised about the potential downgrade of Vistara passengers, particularly those booked in business or premium economy classes, being reassigned to economy on Air India flights due to limited availability in those higher classes.
However, sources have provided assurances that ...
Initially, Air India’s management had contemplated delaying the merger until its fleet underwent upgrades, keeping Vistara as a premium product carrier in the interim. This strategy was eventually discarded due to growing concerns among Vistara employees about key roles in the merged airline being assigned to Air India personnel. Consequently, the merger is now scheduled to be completed by the end of this year, even as Air India’s comprehensive transformation efforts continue.
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