Air India to operate as merged entity from 2025; no Vistara brand by year-end

The airline group will operate two brands - Air India and AI Express after the integration.
The airline group will operate two brands - Air India and AI Express after the integration.

Summary

  • The integration of Air India Express with AIX Connect is currently awaiting the nod from NCLT and the process is expected to be completed within another two months

Dubai: The Tata group will bid goodbye to the Vistara brand by the end of the year, as it aims to bring its four airlines under one umbrella. According to three executives aware of the timelines, the Tata group complete the integration process late this year and start 2025 with just two brands: Air India, a full-service carrier, and Air India Express, a low-fare airline.

"The integration of Air India Express with AIX Connect (formerly called AirAsia India) is currently awaiting nod from the National Company Law Tribunal (NCLT). We expect this process to complete within another two months or so," said one of the three executives, all of whom spoke on the condition of anonymity.

The executives spoke to Mint on the sidelines of the annual general meeting of the International Air Transport Association (IATA), a global airline body.

Also Read: Folding four airlines into two is a tough task even for Tatas 

Once NCLT gives its permission, Tata group hopes to take another 4-5 months to merge the air operator certificates of AIX Connect and Air India Express.

The Tata group acquired both Air India and its subsidiary Air India Express in January 2022. In November 2022, it announced the merger of Air India with Vistara and AIX Connect with Air India Express. As part of the transaction, AirAsia Bhd sold its 16.67% stake in the airline to Tatas for 155.65 crore.

While Air India Express and AIX Connect already have common branding in boarding passes and airport check-in, they will be able to fly under a single air operator certificate and the common IATA code of IX once the air operator certificate is merged. Currently, AIX Connect operates with the I5 code.

"In context of parent company Air India, the route rationalization has already been done massively," a second executive aware of the development said. 

“Air India has stepped up its presence on routes with more of corporate traffic such as Mumbai-Dubai, Delhi-Dubai while those routes with more of visiting friends and relatives, leisure, small and medium enterprises such as international and domestic connections from Tier-2 and Tier-3 cities are now increasingly being served by Air India Express."

Integration exercise

Vistara is currently a 51:49 joint venture of Tata Sons and Singapore Airlines. After the merger, Singapore Airlines will hold a 25.1% stake in the merged entity.

"The written order on the merger of Vistara with Air India is likely within a month. Once that is received, we will start the transfer of people and aircraft gradually. We will also start informing customers that the brand Vistara will cease to exist by the end of this year and be merged with Air India," a third executive said.

While the merger of Vistara with Air India has been a concern for the employees of Vistara, the airline has been addressing these issues. Currently, Vistara is operating at 95% of its capacity after the airline faced flight cancellations due to a combination of poor rostering and unhappy pilots.

"Once the written NCLT order is received, approval from Department for Promotion of Industry and Internal Trade will be awaited. Meanwhile, transfer of human resources will be initiated. Network-wise, the airline should be able to reach 100% of its earlier network by July-August," he added.

Vistara operated around 306 flights per day in April compared with 340 flights per day as of March.

(The correspondent is in Dubai on the International Air Transport Association’s invitation.)

Also Read: Vistara would have had to compensate passengers if India had this law

 

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