We knew these discussions were going on, but it’s now official — Air India and Vistara are merging, and Singapore Airlines will remain involved in the new Indian mega-airline.
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Air India & Vistara will merge by March 2024
In late 2021, plans were announced for Air India to be privatized. Specifically, Tata Group, which was also Air India’s initial owner when the company was first founded, would be taking control of the airline again.
Interestingly Tata Group already had a significant investment in Indian aviation, as the company owned 51% of Vistara and 84% of AirAsia India. Singapore Airlines was also involved here, as the airline had a 49% stake in Vistara.
One major question has been how exactly those different brands would be managed, and now we know. Air India and Vistara will be undergoing a full-on merger, with the goal of “creating India’s leading airline group.” The current plan is for the airlines to merge by March 2024. AirAsia India and Air India Express are also part of this deal, and will be part of the combined airline group as well.
Singapore Airlines will remain involved in the new airline. Singapore Airlines will invest a further $250 million in the new company, and will have a 25.1% stake in the new combined airline.
It’s expected that Air India will be the surviving brand, so you can expect that the entire new airline will continue to be branded as Air India, and the Vistara brand will eventually disappear. It’s pretty wild to think that Singapore Airlines will own a sizable stake in Air India. That certainly puts the pressure on improving quality…
This is a logical development for Indian aviation
I think many were excited when it was announced that Air India would be privatized, as the hope has been that under new management, so many of the things that have been wrong with Air India for years would be fixed. In particular, this includes a lackluster customer experience. The company appointed a new CEO who previously worked at Scoot and Singapore Airlines, which seemed like a smart move.
Admittedly Rome wasn’t built in a day, but I’m sure I’m not the only one who feels like Air India hasn’t had much of a transformation so far:
- Yes, Air India is benefiting greatly from Russian airspace being closed to many airlines, as the airline is able to more competitively operate flights to the United States, since it can operate routes that US airlines can’t
- Air India did announce plans to acquire 30 planes, including some former Delta Boeing 777s, which is good news
- However, we haven’t seen a major order for factory fresh wide body jets, and for that matter we haven’t seen any plans to refresh Air India’s awful long haul product, which is woefully uncompetitive
And that brings us to this development — a full-on merger between Air India and Vistara makes perfect sense. Currently the two airlines are competing directly with one another in many markets, even though they have the same owner. Vistara has a much better inflight product than Air India.
You’d think a logical move would be to have Air India adopt Vistara’s product going forward, to create a better and more consistent customer experience. It’s anyone’s guess if that actually happens, but I’m rooting for it. I fear the reality may end up being that Air India drags Vistara down, rather than the other way around.
Then again, I have some hope based on Singapore Airlines being involved in the new airline, since there’s probably not an airline in the world that cares more about quality than Singapore Airlines.
Bottom line
While it has been rumored for quite some time, it’s now official — Air India and Vistara are merging. The combined airline will be owned by Tata Group and Singapore Airlines. Air India is expected to be the surviving brand, and the merger should be completed by March 2024.
Suffice it to say that Tata Group and Singapore Airlines have a massive task ahead of them. It would be amazing to see Air India transform into a world class airline. Whether or not that’s realistic remains to be seen.
What do you make of Air India and Vistara merging?
I am fully confident that the airline will exhibit a favorable turn-around since it is under the ownership of Tata - one of the most well-known global brands and Indian industrialists, which uphold quality at its forefront. It is not surprising that SQ decided to partner with the Tata family. The sad truth is that AI will improve and join the group of good global Airlines, but we will be stuck with the status quo in Europe and the Americas.
All these years, the biggest reason for the dismal service from AI was due to it being government owned. In fact, the previous Aviation Minister, Praful Patel, did his worst to sink AI, in favor of Kingfisher & probably the ME3.
Now that AI has been privatized it is going to improve significantly.
Don't understand all the hatred for this airline. I doubt most who comment on AI posts have even flown aboard AI. Certainly seems like many commentators are juveniles given the quality of the comments. As someone who has flown AI, there are pros and cons. I wish people were just as critical regarding the terrible airlines flying around in the US and Europe. Then, we might benefit from improvement ourselves. The sad truth is that,...
Don't understand all the hatred for this airline. I doubt most who comment on AI posts have even flown aboard AI. Certainly seems like many commentators are juveniles given the quality of the comments. As someone who has flown AI, there are pros and cons. I wish people were just as critical regarding the terrible airlines flying around in the US and Europe. Then, we might benefit from improvement ourselves. The sad truth is that, just like the global trend, we will remain superior only in our egos.
It will fail. Vistara has its own flaws but air India is riddled with lazy people that will not change anything.
You can rebrand SH*T and call it brownie but SH*T is Sh*t
They will waste money on rebranding and getting new planes but the culture is same old crappy service and lazy people.
I will pay $500-700 more to fly SQ metal any day.
I don't think any airline would miss your hard-earned cash nor your loosely knitted (SH*T) opinion, but thanks for enlightening us.
It's a typical story of a child and their parent. When SQ was still emerging, AI led the way in service and quality. SQ approached AI for growth and learning. The child has grown up and is now returning the "favor" by helping the aging parent. OK - not so nostalgic since the relation comes down to financial motives, but still a good story.
Having said that, I flew AI's 787 biz product from LHR...
It's a typical story of a child and their parent. When SQ was still emerging, AI led the way in service and quality. SQ approached AI for growth and learning. The child has grown up and is now returning the "favor" by helping the aging parent. OK - not so nostalgic since the relation comes down to financial motives, but still a good story.
Having said that, I flew AI's 787 biz product from LHR to DEL recently and was satisfied with the in-flight service, food, and ground services. The hard product left more to be desired, but as someone used to frequently shuttling around on BA, UA and AA, the experience was more than comfortable.
It was inevitable that the Air India brand would remain since it bears the nation's name. As the global geopolitics show, India is flexing itself as a self-reliant nation flush with cash. The AI brand will be a powerful carrier in this sense of its national identify.
AirAsia Group plans to divest from the Indian market, so I think the low cost carriers will consolidate too
https://www.flightglobal.com/strategy/airasia-exits-india-business-with-sale-of-shares-to-tata-groups-air-india/150804.article
How about we wait and see?
With SQ involved along with showing what could be achieved with Vistara, a major change is going to take place with AI.
A lot of the old crud, old habits and staff with bad attitudes will be replaced. It's India, and there is no shortage of great people to be trained to the highest levels of service.
Having flown Vistara many times, I can say there is much...
How about we wait and see?
With SQ involved along with showing what could be achieved with Vistara, a major change is going to take place with AI.
A lot of the old crud, old habits and staff with bad attitudes will be replaced. It's India, and there is no shortage of great people to be trained to the highest levels of service.
Having flown Vistara many times, I can say there is much to celebrate!.
Also, India is one of the few countries sitting on a ton of cash, not dependent on the rest of the world and their faltering economies.
Watch what's about to happen.
The irony here is that, decades ago, when Singapore was just starting their airline, they approached.... Air India for advice and guidance on how to start a luxury, flagship international airline. That's how good Air India used to be.
Now it's the former student's time to teach its old master a few new tricks :-)
I haven't flown AI in a few years, but I've always thought that the ground operations were atrocious (delays, mechanical...
The irony here is that, decades ago, when Singapore was just starting their airline, they approached.... Air India for advice and guidance on how to start a luxury, flagship international airline. That's how good Air India used to be.
Now it's the former student's time to teach its old master a few new tricks :-)
I haven't flown AI in a few years, but I've always thought that the ground operations were atrocious (delays, mechanical issues, missed connections, etc.), and that the hard product was mediocre at best, but the actual people and soft product was pretty good. Even the ground staff like the ticket agents , you could see, generally tried their best to make the most of a bad situation. And in-flight, the attendants were always nice and provided good service (I understand YMMV).
If they can build on that kernel of service culture that already exists, and also improve the rest of the airline's operations, they could be well on their way back to reclaiming their former glory.
I will be flying AI 777-300ER in two weeks and will report back if the soft product is any better but my aunt travelled on the same route DEL-YVR two months ago in Y and was blown away by the service compared to AC. Here to hoping my first ever J travel is not that disappointing.
My in laws arrived last week on the US on Air India 787 DEL-IAD, business class. They have experienced Etihad, emirates, and Qatar long haul business to the USA for comparison. They said the service and food was outstanding. The 787 hard product in business is still 2-2-2 lie flat, but they were blown away by the quality of service and food. They received pajamas and slippers as well. The stewardesses were all young and...
My in laws arrived last week on the US on Air India 787 DEL-IAD, business class. They have experienced Etihad, emirates, and Qatar long haul business to the USA for comparison. They said the service and food was outstanding. The 787 hard product in business is still 2-2-2 lie flat, but they were blown away by the quality of service and food. They received pajamas and slippers as well. The stewardesses were all young and friendly - a far cry from the mean Air India "aunties" I and others in my generation of Indian-americans have certainly experienced in the past. Seems to have been a definite shift in focus of the company.
I sincerely hope some of the commenters will give the new Air India a try. I understand they have a long history of dismal quality, but the first and easiest step to improvement is with the soft product - it seems the new management has figured this out. With time hopefully the hard product becomes more competitive with ME3 as it would be very useful to have nonstops from US to India.
Totally agree with this take. I have talked to several people who have flown on AI since the takeover and they had uniformly told me that the service, quality of food and on-time performance have noticeably improved. I haven´t flown AI in over 25 years so maybe it is time to give them a chance.
I care deeply about climate change, yet some of the mutual funds I invest in own shares of oil companies.
Hypocritical? Maybe, but also extremely common. And that logic is precisely why Singapore Air's investment in the new Air India will make absolutely no difference in terms of customer experience. Their own brand depends on providing customers a quality experience. Why would that apply to the companies they invest in (whether airlines or anything else)?
I think you missed the bigger point - Vistara is a high quality Indian carrier that is currently owned by Tata and Singapore Air. It follows suit that as Tata and Singapore will now jointly own the larger Air India conglomerate, their philosophies on running the airlines as high quality will parallel what they did with vistara.
Your analogy to owning shares of oil companies despite your beliefs on climate change is inaccurate. Fossil...
I think you missed the bigger point - Vistara is a high quality Indian carrier that is currently owned by Tata and Singapore Air. It follows suit that as Tata and Singapore will now jointly own the larger Air India conglomerate, their philosophies on running the airlines as high quality will parallel what they did with vistara.
Your analogy to owning shares of oil companies despite your beliefs on climate change is inaccurate. Fossil fuels will always be anti climate - this fact will never change. But Air India does not necessarily have to always remain crappy - they can (and hopefully) will dramatically change for the better.
For the time being - let's forget about profitability though!
Weird take. If you owned 25% of Air India, you would want the airline to succeed
Being PROFITABLE as an investment doesn't necessarily mean they are caring/looking at Customer Service scores Y'all. Just saying.
Agreed - UA, AA, LH, BA, LX, AF are just some examples of terrible service despite lucrative investments.
Having said that, TATA is well known for turning around struggling businesses; there are many case studies but perhaps the global community are more aware of Jaguar Land Rover.
Air India is an awful airline with filthy planes and unreliable service, yet it has a brand name that endures. Hopefully the merger will fix its decades old problems.
This is precisely part the reason for the rise of ME3 approximately 15-20 years ago. If you think back to before those days, long haul India-US or India-Europe was dominated by AF, BA and Lufthansa - and these airlines back then were nothing special in terms of quality - it was just that Indian carriers were that bad. That opened the door for the Middle East to basically take over that significant traffic by beating...
This is precisely part the reason for the rise of ME3 approximately 15-20 years ago. If you think back to before those days, long haul India-US or India-Europe was dominated by AF, BA and Lufthansa - and these airlines back then were nothing special in terms of quality - it was just that Indian carriers were that bad. That opened the door for the Middle East to basically take over that significant traffic by beating the Europeans on quality and price.
It's a lofty goal, but if the new air India can compete with both ME3 and euro carriers with quality and price, they can take back a significant market share of intercontinental traffic, particularly having the advantage of nonstops.
...yet it is not AI which strands tens of thousands of passengers annually due to strikes over just about anything... but again strikes are synonymous with the lazy European culture ;)
You’re right a lot of work will need to be done to bring Air India back from the precipice- it’s slide into becoming a lousy carrier into something sustainable and workable is a long-haul journey ( pardon the pun )