TATA Group and Singapore International Airlines Joint Venture Airline – Vistara is expecting to receive all the legal approvals for merger with Air India by the first half of 2024. In February 2023, Air India announced its intent to liquidate Vistara into the Air India Brand.
Operational Merger by 2025
Recently, Air India Chief Executive Officer Campbell Wilson in an interview said that the operational merger of both Air India and Vistara will be delayed on purpose. The reason behind the delay is the low-quality products and services of Air India. Wilson said that till the time Air India does not gain appropriate service standards, the merger will not happen.
Now, Vistara CEO Vinod Kannan has also confirmed the same. Kannan in an interview with Livemint said that the airline expects to receive all legal approvals by the first half of 2024.
By March 2024, the airline is expecting approvals from all competition authorities. However, the operational merger will take place only by early or mid-2025. The current Air Operator Certificate (AOC) of Vistara will expire in December 2024 and it seems that the airline will need to renew it.
In September 2023, the Competition Commission of India approved the proposed merger of Air India & Vistara on the condition that both Air India and Singapore International Airlines will have to operate the stated minimum flights on some routes. Post-merger, Singapore International Airlines will acquire a 25.1% stake in Air India.
Vistara: Last Boeing 787 Delivery before Merger
Vistara currently has a fleet of 67 aircraft. The airline is yet to receive 2 Airbus A320neos and 1 Boeing 787-9 Dreamliner. With the deliveries of these aircraft, two major milestones will be achieved. One is that Vistara will reach a fleet of 70 aircraft. The other one is that Vistara will take deliveries of all the aircraft.
The last Boeing 787 delivery is expected to be in March 2024. The aircraft registered as VT-TSN has already conducted 38 hours of test flights. On June 29, 2023, it was ferried from Victorville to Paine Field after a long period in storage.
The airline has announced the initiation of Mumbai to Paris flights in the upcoming Summer Schedule. It will operate five times weekly utilizing the Boeing 787-9 Dreamliner aircraft.
Every year, the Indian Government declares a budget in the parliament which includes the last year’s results as well as investment expected in the current year. Vistara CEO expects the government to try to make an atmosphere sustainable for airlines to operate in India. The government has a lot more issues to deal with.
Kannan seems to be happy with the Value Added Tax (VAT) reduction in ATF prices. After getting requests from the Union Civil Aviation Ministry, many states have reduced the VAT on ATF. As a result of this, airlines have hugely benefitted.
The change in the mechanism of ATF charges has also proved to be beneficial for the airline. Some states and Union Territories are still not reducing VAT. These include Delhi, Assam, Tamil Nadu and West Bengal.
Airports have been requesting the government to allow them to sell domestic Indian liquor at departures tax-free. This will allow Indian brands like Indri & Amrut to expand their presence.
In conclusion, Vistara will undergo merger with Air India in 2025 and will receive the last Boeing 787 delivery by March 2024. The airline expects all legal approvals from Competition authorities by the same time.