The grand alliance is again in the skies of India. That Tata group is holding hands.
Speculation has been going on for a long time. The news was coming through various sources. Now Tata Sons and Singapore Airlines have announced that they have finalized the decision to create a company by merging Vistara with Air India (AI). The Tata group claims that this move is aimed at becoming the best airline in India. Concerned circles are reminded that the previous two alliances in the country’s aviation sector were held by the Tatas. This Vistara is a joint venture of Singapore Airlines with them. And Air Asia India together with Air Asia of Malaysia.
Statement from concerned quarters
According to the concerned quarters, the current situation of the country’s domestic flight market, the proposed enhanced AI should be second. Indigo is number one with a 56.7% share. As of October, Ai-Vista’s overall occupancy is 18.3%. According to Tatas, their primary goal is to become India’s largest international airline. And in terms of domestic and international services, they are going to be the largest airline in the country. 218 aircraft will be on hand (53 of which are Vistara). Now, AI’s domestic and international flights travel to 51 and 38 destinations respectively. Vistara has 31 and 10.
The aviation industry is slowly recovering from the shock of Corona. Same in India. Akash Air has recently launched its services. Jet Airways is about to enter the market in a new way. In this situation, the merger of AI-Vistara will increase the competition among the airlines, especially in the Indian skies. Everyone will be interested in whether its benefits reach the passengers. Tata Sons chairman N Chandrashekharan promised better services in a statement.
As a result of this merger, India’s aviation sector is going to be largely bipolar, says consultancy Kapa. Where 75% to 80% of control is going to be in the hands of Indigo and AI. But it will strengthen the overall system.
AI is now wholly owned by Tata. Their share in Vistara is 51%. The rest belongs to Singapore Airlines. Singapore’s state-owned airline will have a 25-point 1 per cent stake in the combined entity, the two companies said today. They will pour 2018-point five crore rupees. All expansions will require additional capital expenditures by the two companies. The merger is expected to be completed by March 2024. But before that, we want the consent of all concerned regulators. Until then, the service will continue as it is now, said Vinod Kannan, CEO of Vistara.
Wrapping up
The Tata Group’s air services business is now spread across four entities. AI, Air India Express, Vistara and Air Asia India. Their combined share in the country’s market is 25.9%. But the concerned circles feel that the Tatas were trying to get back into the business of air services for almost three decades. Had to fail a few times. AI started its journey in 1932 with its hands. Then the name was Tata Air Services.