Vistara CEO Targets Mid-2025 Completion for Air India Merger
Vistara’s CEO Vinod Kannan has shared optimistic projections with Indian media regarding the airline’s merger with Air India. The expectation is to obtain all necessary legal approvals by mid-2024 and finalize the merger by mid-2025. This significant consolidation within the Tata Sons-controlled aviation sector was announced in late 2022 and received the green light from India’s competition agency in September 2023.
The merger will involve integrating Vistara into the larger Air India operation. As part of the deal, Singapore Airlines, which currently holds a 49% stake in Vistara, will receive a 25.1% stake in Air India. This strategic alliance hinges on several approvals, including antitrust clearances from various countries, such as Singapore, where Vistara operates. Kannan is confident these approvals will be secured soon, with other regulatory and legal nods expected by June 30.
Singapore Airlines is not only contributing its Vistara stake but also making an upfront investment of INR 20.59 billion (USD 248 million) in Air India, with further capital injections planned for the future.
Amidst the merger process, Vistara continues to grow independently, having added 17 aircraft recently, bringing its fleet to 67. The airline is set to further expand this quarter with the induction of a B787-9 and two A320-200Ns. Kannan emphasizes Vistara’s commitment to enhancing flights and capacity, including new medium-haul destinations like Denpasar and Hong Kong International.
Once completed, the merged entity will become India’s second-largest carrier, trailing only IndiGo Airlines in market share. IndiGo currently dominates with over 60% of India’s weekly domestic seat capacity, while the combined Air India/Vistara entity will command just under 20%. This merger and the concurrent fleet expansion by both airlines signal a competitive and dynamic phase in Indian commercial aviation, setting the stage for a market share battle, especially as smaller carriers like SpiceJet face challenges.