Tata Group Plans To Merge Carriers Under Air India, Scrap Vistara Brand: Report

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

Tata Group is considering a plan to integrate its four airline brands under Air India Ltd., as the conglomerate prepares to rebuild its faltering aviation empire, quoting sources with knowledge of the matter said, news agency Bloomberg reported on Friday.

According to the report, the Tatas are also considering scrapping the Vistara brand, which is Singapore Airlines Ltd’s local affiliate in India, the sources said. Singapore Airlines is evaluating the size of the stake it should take in the combined entity, one of the sources added.

Representatives for Tata Group, Air India, Singapore Airlines, and Vistara didn’t respond to Bloomberg’s 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 Chief Executive 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 India'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 another 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.