Home/ Companies / News/  Air India to end brand Vistara after merger

New Delhi: Air India, owned by the Tata group, will discontinue the Vistara brand on completion of its merger with Tata SIA Airlines Ltd, the operator of Vistara airline, chief executive and managing director Campbell Wilson said.

“Vistara clearly has a very strong recognition in the Indian market...but if you look outside the Indian market, clearly Air India is much more recognized and has a 90-year history. So, the future full-service carrier will be called Air India, but we would like to retain and celebrate some of the Vistara heritage in that new manifestation," Wilson told reporters in a virtual press conference.

While Tata-run Air India completed a year of privatization in January, Vistara started operations in January 2015 as a 51:49 joint venture between Tata Sons and Singapore Airlines.

In November 2022, Singapore Airlines and Tata Group announced a merger between Air India and Vistara, with Singapore Airlines holding 25.1% of the merged entity. The merger is expected to be completed by March 2024.

Vistara became the second-largest domestic airline in India in July 2022 and retained the title for six months. In January, Air India overtook Vistara as the second-largest airline with a market share of 9.2%. IndiGo is the largest domestic airline with a 54.6% market share, while Vistara has a share of 8.8%. “We expect many of the systems and practices will be those of Vistara...being a younger privatized airline that has been able to imbibe the learnings it brings from its other shareholders. A lot of transformation that we have been doing at Air India is with a view to putting us on a similar platform as Vistara," Wilson said.

The airline is also working with external parties to figure out opportunities in integration between the two full-service carriers, what should be the focus areas, and what will the end product look like once the regulatory and other approvals are received for the merger, he said.

Air India has also decided to retain the Maharajah brand and is working on developing it in line with the modern world. “We want an Air India brand that respects the past but looks at the future, too," said Wilson.

Earlier this month, the airline made aviation history with the biggest ever aircraft order, agreeing to purchase 840 aircraft, including 470 firm orders, from Boeing and Airbus that will help the Tata group-run airline expand its horizons in India and abroad.

The airline will decide on converting options into firm orders depending on the market situation.

“Requirements for the next few years are catered for by this order. We don’t have a timeline on whether we do or don’t exercise purchase options. We will evaluate the market, our capabilities, and our needs before we take the call to do so. As is normal with these things, there is a timeline by which we need to notify the manufacturer whether we wish to exercise this right," Wilson said. For financing, the airline will opt for a combination of in part financed by cash flows, part by shareholder equity, and will explore sale and leaseback agreements.

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Updated: 27 Feb 2023, 11:57 PM IST
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