The CEO of Vistara (UK, Delhi International) has told Indian media outlets that he expects to secure all the necessary legal approvals for the airline's merger with Air India (AI, Delhi International) by mid-2024 and complete the merger by mid-2025.
The proposed merger of the two Tata Sons-controlled airlines was announced in late 2022 and secured approval from India's competition agency in September 2023. It will see the Vistara operation subsumed into the bigger carrier. Vistara shareholder Singapore Airlines (SQ, Singapore Changi) will acquire a 25.1% stake in Air India in exchange for foregoing its 49% Vistara stake.
However, the merger still needs approval from competition agencies in certain other jurisdictions, which Vistara CEO Vinod Kannan thinks will happen before the end of this quarter. Other outstanding regulatory and legal approvals are expected by June 30. But he says the operational merger may well stretch into 2025.
“We expect antitrust clearances from several countries we operate to, including Singapore," Kannan said. "We also expect the final nod from the National Company Law Tribunal, the aviation ministry, the Directorate General of Civil Aviation, and government approval for the investment by Singapore Airlines in the next few months."
Singapore Airlines has also agreed to an upfront investment of INR20.59 billion rupees (USD248 million) in Air India along with further capital injections down the track.
Kannan confirmed that Vistara will continue to operate as a single brand until the merger is finalised. He says that between announcing the merger and now, Vistara has added 17 aircraft to build its overall fleet to 67. This quarter, Kannan said that Vistara intended to induct another B787-9 and two more A320-200Ns. He said that in addition to increasing the fleet, his airline would continue to add flights and capacity, including to new medium-haul destinations such as Denpasar and Hong Kong International.
The merged airline will become India's second-biggest carrier. Measured by market share, IndiGo Airlines (6E, Delhi International) is currently the country's largest operator. It presently provides over 60% of India's weekly domestic seat capacity. The combined Air India/Vistara entity clocks in at just under 20%. The fight for market share is likely to become a defining feature of Indian commercial aviation in the medium term as both the flag carrier and Vistara have recently placed massive aircraft orders while smaller carriers like SpiceJet (SG, Delhi International) struggle.
