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By March 2024, Tata-owned Air India will merge with Vistara.

On Tuesday, Singapore Airlines announced Vistara would be merged with Air India by March of this coming year.

Tata Group already owns a whopping 51 percent stake in Vistara, with the remaining 49 percent under the ownership of Singapore Airlines.

As a part of the transaction, SIA will also invest $250 million in Air India for a 25.1 percent stake. With this merger, Air India will have a combined fleet of 218 aircraft, making it India's most prominent international and second-largest domestic airline. Air India will be the country's premier domestic and international carrier.

A company release said: "As part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, and enhancing safety, reliability, and on-time performance," quoting N Chandrasekaran, chairman of Tata Sons.

Since acquiring Air India for 18,000 crores as part of a government disinvestment program about a year ago, the plan has been to combine all of Tata's aviation brands under the name Air India.

Before this, Air India had declared to expand its fleet to 143 aircraft by the end of 2023 while also introducing Premium Economy seating. Interesting fact: The only airline in the nation to offer Premium Economy seats is Vistara.

According to N Chandrasekaran, Air India would provide both full-service and inexpensive service on both domestic and foreign routes following the merger.

"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 full-service carrier, which has won many global accolades in a short time said Goh Choon Phong, Chief Executive Officer of Singapore Airlines.

According to the airline, Singapore Airlines' portion of any further capital infusion, based on its 25.1 percent post-completion holding, may be up to $615 million, payable only after the merger's conclusion.

The precise sum would depend on several variables, such as how well the expanded Air India's business plan is going and whether it has access to other sources of financing.

In an interview with Skift Vistara CEO Vinod Kannan, he said, "I tell my team that no matter what, the 54 aircraft we have will have to be serviced, sold, and operated." Until we are told otherwise, we will maintain that we will operate independently.


Image: The Indian Express

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