Vistara to continue as independent entity until Air India merger complete, says CEO Vinod Kannan

Dubai: Indian full-service carrier Vistara will continue to operate as an entity independent of Air India until the regulatory approvals for the upcoming merger between both airlines come through, CEO Vinod Kannan confirmed to Gulf News.

Commenting on the eventual fate of the airline, a joint venture of Tata Group and Singapore Airlines, Kannan also said it is yet to be seen if the well-known Vistara brand would be subsumed or continue operating as an independent entity.

“Those are all discussions which are currently ongoing. Ultimately, there will be a much bigger Air India – a combined entity that will incorporate all four brands that the Tatas currently own,” said Kannan.

However, the details are still being worked out. “At this stage, till the regulatory approvals come through, Vistara will continue operating separately. We are operating independently of Air India when it comes to commercial or customer focus because that is the deal as competitors,” the CEO explained at a press conference in Dubai announcing Vistara’s route launch to Muscat, Oman, on Monday, December 12.

Despite the uncertainties around the eight-year-old Vistara’s future, the airline is moving forward full-steam with its expansion plans in the GCC, Middle East, and other international destinations. The airline is also awaiting deliveries from manufacturers Boeing and Airbus for at least 20 new aircraft, including four 787s and several A320s and A321s.

Late last month, Singapore Airlines and Tata Sons announced that they have agreed to merge Air India and Vistara, with SIA getting a 25.1 per cent stake in the merged entity at an investment of $250 million in Air India as part of the transaction. This 25.1 per cent stake will be in an enlarged Air India group consisting of Air India, Vistara, Air Asia India, and Air India Express. All airlines’ mergers are targeted for completion by March 2024, subject to regulatory approvals.

Route, expansion to go ahead as planned

Regarding the region, Vistara considers the UAE, Saudi Arabia, Oman, and Qatar as huge potential catchment areas. The airline said there had been a consistent rise in passenger volumes and demand from the Gulf countries, paving the way for the airline to bolster its presence in the region. The airline announced the launch of daily, non-stop flights between Mumbai (India) and Muscat (Oman) today, its fourth destination in the Gulf region, to expand its footprint in the Middle East.

Muscat is the third Gulf city (Abu Dhabi and Jeddah being the other two) that Vistara has added to its network in the last four months. Vistara also operates daily flights from Dubai to/from Mumbai. In the context of the increased demand for travel between India and the Gulf region, Kannar said Vistara’s Middle Eastern routes have been performing exceptionally well. The inaugural flight will depart from Mumbai at 8 pm IST and arrive in Muscat at 9.35 pm GST.

Vistara is excited about what’s to come

Does Vistara stand to benefit from the upcoming merger? Kannan firmly believes that integrating into a large entity gives the airline opportunities to succeed and grow. “We are very proud of our heritage, being a product of the Tatas. It’s the same heritage, lineage, and the same shareholders. So, this merger is something we are very excited about. And, we are very proud of what we have built over the last eight years,” he said.

Airline deliveries, leasing

“There are four 787s that are due, and the remaining are A3820 and 321s,” said Kannan.

He added: “If all went well, we would’ve had these (aircraft) in the next six months. But that’s unlikely to happen.” The aircraft deliveries are delayed due to supply chain issues. “Our focus from now to mid-2024 is to get delivery of these aircraft. Even then, if you work it out, the delivery timeline is about one to two aircraft every month until then. So that by itself is a huge injection for us.”

Will Vistara receive any of Air India’s historical purchase orders of 500 new aircraft? Kannan said: “AI is handling that. I have no visibility on that, but, as I said, the priority for us is to get the 20 pending aircraft to make sure that we grow – that would be the primary focus.”

Vistara also received a Boeing 787 Dreamliner delivery, which the airline leased from Irish aircraft leasing company AerCap. “Not many airlines have leased 787s. The leased airline went into operation on November 10, which has helped us add capacity to Europe (Frankfurt and Paris). At the moment, we have three 787s, of which two are owned, and one is leased,” said Kannan.