Tata plans to merge carriers under Air India, drop Vistara brand
Air India earlier said it will acquire AirAsia’s local venture, merge it with AI Express
Tata Group is considering a plan to integrate its four airline brands under Air India Ltd, people with knowledge of the matter said, as the sprawling company prepares to rebuild its faltering aviation empire.
India’s largest conglomerate is also considering scrapping the Vistara brand, which is Singapore Airlines Ltd’s local affiliate in the South Asian nation, the people said, declining to be identified because the discussions are private.
Singapore Airlines is evaluating the size of stake it should take in the combined entity, one of the people said.
Representatives for the Tata Group, Air India, Singapore Airlines and Vistara didn’t respond to multiple requests for comment.
Air India is gearing up for a revamp under its new owner Tata. The full-service carrier is considering ordering as many as 300 narrow-body jets, a transaction that would be one of the largest orders ever in commercial aviation history. Air India CEO Campbell Wilson last month said the airline will triple its fleet of 113 aircraft over five years, with a “significant” increase in both narrow and wide-body aircraft.
Air India is also in discussions to raise at least $1 billion in a funding round that could value the carrier at around $5 billion, other people familiar with the matter said in late September. The airline is planning to add 25 Airbus SE and five Boeing Co. aircraft from lessors, starting in December.
Tata was selected as the winning bidder for Air India in October last year after beating rival suitors with a $2.4 billion offer. The transaction marked the country’s most high-profile privatisation under Prime Minister Narendra Modi, ending decades of attempts to offload the money-losing, debt-laden carrier that survived on years of taxpayer bailouts.
It also meant Tata had four airline brands - Air India and other full-service carrier Vistara, along with budget carriers Air India Express Ltd and AirAsia India. Air India earlier this month said it is acquiring AirAsia’s local venture and merging it with Air India Express into a single low-cost carrier. That consolidation will likely happen by the end of 2023.