Vistara will continue to operate as an independent entity as both the Tata group and Singapore Airlines remain invested in its expansion and growth plans, an executive has said.
New Delhi, September 24,2022: Full-service carrier Vistara has denied all speculation of a merger with Air India. The Gurugram-headquartered airline has been in the news lately after reports appeared alluding comments on a proposed merger to the airlineâs CEO Vinod Kannan. Speaking to Business Today, an executive with the carrier said, âWhile the acquisition of Air India by the Tata Group is a positive development and has been one of the biggest events in the [aviation] industry, Vistaraâs plans remain unchanged as it continues to focus on its organic growth until told otherwise by the parent organisations.â
Launched in 2013, Vistara is a 51:49 JV (joint venture) between the salt to software conglomerate Tata group and Singapore Airlines. Ever since the acquisition of Air India by Tatas in January this year, the fate of Vistara and Air Asia, where the Tata group has a stake, has been a subject of intense discussion. According to the reports published in businesstoday.in
âVistara continues to operate as an independent entity and both the parent companies, the Tata Group and Singapore Airlines, remain invested in its growth and expansion plans,â the executive said by way of further clarification.
Meanwhile, in the short and medium term, industry experts see greater operational synergies emerging among the Tata group carriers. âWe could also see greater collaboration between the other group companies, namely Vistara and Air Asia,â said director & practice leader for transport & logistics, CRISIL Infrastructure Advisory, Jagannarayan Padmanabhan.
A merger between the two is not going to be an easy proposition. An industry insider requesting anonymity told BT that it would be a long-drawn-out affair as several hurdles needed to be crossed for that to happen.
âWith regards to product, Vistara has developed a credible, high-quality domestic airline, while Air Indiaâs domestic operations have very little going for it. Although a merger makes absolute sense; unfortunately, it also means that eventually, the Vistara brand and Air Operatorâs Permit (AOP) will have to be retired,â the person said. âThe lead for setting and managing the product and domestic operations should, therefore, be given to Vistara, so that their processes take precedence in setting Air Indiaâs domestic operations right.â
At the same time, the Air India management would also need to pay considerable attention to the absorption of Vistara staff to make the process as little painful for them as possible, the person added.
