Low-cost carrier Vistara will merge with Air India on Nov. 12, 2024, fulfilling Ratan Tata‘s long-held vision of making Air India a world-class airline.

What Happened: Ahead of the merger, the Indian government has approved Singapore Airlines’ investment in Air India, marking a significant step in the consolidation of the aviation sector.

According to the Times of India, the government has approved Singapore Airlines’ FDI into Air India, giving SIA a 25.1% stake by investing ₹2,059 crore.

Starting September 3, customers will be unable to book Vistara flights for travel after Nov. 12, 2024, and existing bookings after this date will be converted to Air India flights.

This transition will occur in phases during September, with individual notifications sent to customers, according to Air India CEO Campbell Wilson.

All flights post-merger will be operated by Air India, with bookings redirected to Air India’s website. Vistara’s frequent flier miles will merge into Air India’s program.

See Also: Gautam Adani Surpasses Mukesh Ambani As India's Richest Person

The merger announcement followed India’s approval of SIA’s FDI. SIA, which owned 49% of Vistara, stated its commitment to supporting the growth of Air India Group, enhancing its presence in all key Indian airline market segments.

Wilson welcomed Vistara employees to Air India, urging a smooth transition for customers and staff. He emphasized the joint team’s goal of offering an expanded network, additional flight options, and an enhanced frequent flyer program.

Why It Matters: The merger of Vistara and Air India is a significant event in India’s aviation sector, reflecting broader industry trends and challenges.

In a recent interview, Vistara CEO Vinod Kannan highlighted the sector’s resilience despite external risks such as fuel costs and currency fluctuations. He noted that while the demand for aviation in India remains strong, these external pressures could impact growth.

Additionally, the integration of employees from both airlines will be phased, addressing concerns about job security and operational continuity. This phased approach aims to ensure a smooth transition for staff and maintain business operations until Vistara’s air operator certificate is surrendered.

The merger also had to address competition concerns raised by the Competition Commission of India (CCI). Both airlines assured the CCI that the merger would not stifle competition, emphasizing the presence of other competitors on most routes.

Read Next: NHPC Granted Navratna Status By Govt

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Unsplash