Singapore Airlines, Tata talk Vistara-Air India merger

It is unclear at this stage what stake, if any, SIA would have if Vistara merges into Air India, or whether fresh funds would be needed for Air India. Still, the change of stance by SIA is significant as it did not agree to partner Tata Group when the latter was bidding for Air India. Tatas had expected that SIA would join it and it would bid for the state-owned carrier through Vistara. Though, SIA did not agree to it, it waived the no-compete clause, which enabled Tata Group to go ahead with its bid for Air India.

The integration of Vistara with Air India will create the second largest airline in the country, after IndiGo. The Tata Group is also merging its other airline, AirAsia India with Air India Express. The Competition Commission of India has approved this merger.

Tata Sons chairman, N Chandrasekaran has often said that the Group’s airline businesses, which operate on thin margins, must be consolidated to ensure operational efficiencies and cost control.

“We will definitely have both full service and low-cost carrier ,” Chandrasekaran said few days ago at a public function. “It’s a long journey. We will have to work on many aspects of the airline and we are working at great speed. Essentially, we will have one airline with two platforms,” he had added. Air India’s fleet strength is twice compared to Vistara. Air India has a total of 113 aircraft while Vistara fleet stands at 54. Air India has a total of 11 variants of Boeing and Airbus planes while Vistara has five variants of the same two manufacturers. In September, Tata Group announced Air India’s first major expansion wherein it promised to add 30 new aircraft in the coming months which would boost its fleet by over 25 per cent. The group signed leases and letters of intent for 25 Airbus narrow-body and five Boeing wide-body aircraft. FE