Cabinet clears SIA's investment in Air India; Vistara to sunset on Nov 11

Vistara will maintain its aircraft, schedule, operating crew under its brand name until early 2025

Indian carrier Vistara on Friday announced it would operate its last flight on November 11, as part of its merger with Tata Group-owned Air India. Vistara is a 51:49 joint venture between the Tata Group and Singapore Airlines (SIA).

The announcement came a day after the Union Cabinet approved a foreign direct investment of Rs 2,059 crore by SIA in Air India.

With this approval, SIA will acquire a 25.1 per cent stake in Air India, marking the last major step in the merger of Vistara.

Starting September 3, passengers booking flights departing after November 11 will be redirected to Air India’s website. However, Vistara will continue to operate its fleet and maintain its schedule under its brand name until early 2025. The airline’s loyalty programme will also be migrated to Air India.

The Tata Group initiated the merger in November 2022, 10 months after regaining control of Air India from the government through the disinvestment process.

Launched in 2015, the loss-making Vistara, with a market share of 10 per cent as of July, operates 2,391 flights per week with a fleet of 70 aircraft.

Vistara Chief Executive Officer (CEO) Vinod Kannan thanked customers for their support over the past decade.

“As we progress further in our growth journey, we want to emphasise that this merger is about offering more choice with a larger fleet and a wider network, while elevating the overall travel experience,” he said, adding that the merged entity would remain committed to ensuring a smooth transition.

Air India CEO and Managing Director Campbell Wilson said the transfer of aircraft and crew from Vistara’s Air Operator Certificate to Air India was scheduled for November 12.  

“For Vistara flights on or after November 12, the flight numbers will change to Air India ones, even though in nearly all cases, the aircraft, schedule, and operating crew will remain unchanged until early 2025,” he said.

Wilson said customers already booked on Vistara flights after November 12 would automatically have their reservations converted to Air India flight numbers. “This will occur in phases during September, and customers will be individually informed when this happens,” he said.

Vistara has issued a detailed set of Frequently Asked Questions (FAQs) to provide more clarity to passengers regarding the merger.

Sources said around 500-600 employees, out of a total of 23,000 from the carriers, are expected to be retired or separated.

Wilson said the human resources teams were working on the transfer of Vistara employees who had not already been seconded to Air India. “As we now embark on the final stretch of this long and complicated process, let’s maintain the focus and effort to ensure that our collective customers and colleagues experience the smoothest of transitions,” Wilson said.

Vistara has been a loss-making airline since its inception. In 2022-23, the airline recorded a net loss of Rs 1,393 crore. Since its launch in 2015, Vistara has seen an infusion of Rs 9,900 crore.

In November 2022, Vistara raised Rs 650 crore from its shareholders, which was the last fundraising from its parent companies, Tata Group and SIA.

Currently, Air India Group comprises Air India, Air India Express, AIX Connect (formerly AirAsia India) and Vistara. As part of consolidation of Tata Group’s airline business, AIX Connect is in the process of merging with Air India Express.