Vistara-AI merger: Tata Group’s another step to consolidate airline business

New Delhi: With the merger of Vistara and Air India (AI), Tata group is taking another step to consolidate its sprawling airline business into full service and low-cost operation segments. The merger is aimed at having a single low-cost carrier for the Air India group, said the Tata Group in a statement. Post-merger, the entity will be branded as Air India Express, it added. Currently, Vistara and Air India are the country's second and third largest domestic carriers, respectively. Together, their market share stood at 18.3 percent in October. If AirAsia India is also included, the cumulative market share of Tata group-owned airlines in the domestic market will be 25.9 percent. Individually, AirAsia India's domestic market share was at 7.6 percent. Tata group also owns Air India Express, which is focused on international low-cost operations.

'AI will become the country's largest international carrier and second largest domestic carrier'

While announcing the Vistara-Air India merger on Tuesday, Tata group said that Air India will become the country's largest international carrier and second largest domestic carrier.

Vistara, which is jointly owned by Tata group and Singapore Airlines, is the country's second largest domestic airline after IndiGo, which had a market share of 56.7 percent in October. "With this consolidation, Air India shall be India's leading domestic and international carrier with a combined fleet of 218 aircraft," Tata group said in a statement.

Air India to hire expat pilots for its wide-body planes

As on September, Air India group and Vistara had 165 planes and 53 planes, respectively, according to a regulatory filing by Singapore Airlines (SIA) on Tuesday. Air India group was flying to 51 domestic destinations while Vistara was operating to 31 local destinations. In terms of international destinations, Air India group was flying to 38 places whereas Vistara was operating to 10 places.

At the end of September, together they had a domestic market share of 23 percent while the international market pie was also at 23 percent, as per the filing.

Operational review process was underway to integrate AirAsia India with Air India Express

On November 2, Air India said an operational review process was underway to integrate AirAsia India with Air India Express and the merger was likely by the end of 2023.

On October 18, Air India chief Campbell Wilson said the airline aims to have a 30 percent share in domestic and international markets in the next five years.

In October, among the scheduled carriers, SpiceJet's market share stood at 7.3 percent, Go First at 7 percent and Akasa Air at 1.4 percent, according to official data.

(With PTI inputs)

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