Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Airlines

Air India-Vistara Merger to be Completed by March 2024

5 days ago

Tata Sons and Singapore Airlines have agreed to consolidate Air India and Vistara by March 2024, .

As part of the merger transaction, Singapore’s flag carrier shall also invest $250 million in Air India for a 25.1 percent share, according to a media release on Tuesday.

Tata Group owns a 51 percent stake in Vistara with Singapore Airlines owning remaining 49 percent.

With this consolidation, Air India shall be India’s largest international carrier and second largest domestic carrier with a combined fleet of 218 aircraft.

Air India had earlier announced its plans to increase its fleet size to 143 by the end of 2023 and also introduce Premium Economy seating. Intrestingly, Vistara is the only airline in the country offering Premium Economy seats.

Post the merger, Air India would offer both full-service and low-cost service across domestic and international routes, said N Chandrasekaran, chairman of Tata Sons.

Air India, the erstwhile Indian state carrier the flag carrier of India, had been acquired by Tata Sons, via its subsidiary, Talace, early this year as part of a $2.4 billion deal.

Singapore Airlines said it intends to fully fund this investment with its internal cash resources, which stood at $13 billion as of September 30.

The two companies have also agreed to participate in additional capital injections, if required, to fund the growth and operations of the enlarged Air India in financial year 2023 and 2024.

Based on Singapore Airline’s 25.1 percent stake post-completion, the airline said that its share of any additional capital injection could be up to $615 million, payable only after the completion of the merger.

The actual amount would depend on factors including the progress of the enlarged Air India’s business plan, and its access to other funding options.

Speaking earlier to Skift, Vistara CEO Vinod Kannan, while not totally denying reports of a merger between the two airlines, had said, “I tell my team that no matter what, the 54 aircraft that we have will have to be serviced, sold and operated. Until we are told otherwise, we will maintain that we will be operating independently.”

Airlines

AirAsia India-Air India Merger by 2023 as AirAsia Sells Off India Stake to Tatas

4 weeks ago

Budget carrier AirAsia India is likely to be merged with Air India Express by the end of 2023. An operational review process is underway to integrate the two carriers, Air India said in a statement this week.

The merger news follows Malaysia-based AirAsia Aviation Group’s announcement on Wednesday that it has sold off its remaining 16.67 percent stake in AirAsia India to Tatas-owned Air India.

The agreement that will fetch AirAsia $18.83 million, also states that AirAsia India can continue to use the ‘AirAsia’ brand name for 12 months.

Aimed at having a single low-cost carrier for the Air India group, following the merger the entity will be branded as Air India Express, a statement read.

In June, Indian watchdog Competition Commission of India had approved the proposed acquisition of the entire shareholding of AirAsia India by Air India.

Following the acquisition of Air India and Air India Express in January, the Tata Group now owns four airlines — Air India, Air India Express, AirAsia India and Vistara. Vistara is a joint venture with Singapore Airlines.

In a recent interview with Skift the Vistara CEO when asked about a possible merger between the airlines under the Tata fold had said that there are certain discussions that have been happening which he is not privy to.

Commenting further on AirAsia selling off its remaining stake to Air India, Group CEO of AirAsia Aviation Group, Bo Lingam, said Covid has allowed them to re-examine priorities, and the group feels it is best suited for AirAsia to develop an Asean-only business with airlines in Malaysia, Thailand, Indonesia and the Philippines.

“We will use the experience and knowledge we have gained from operating in the Indian domestic market to grow the Asean-Indian market in logistics and passenger services to a far greater extent,” Lingam added.

Launched in 2014, AirAsia India currently flies to 18 destinations with a market share of 5.9 percent.

Airlines

Singapore Airlines and Tata Talk Potential Air India Stake

2 months ago

With a former Singapore Airlines executive at the helm of Air India, it comes with little surprise that the Singaporean airline could take a stake in the Tata Group-owned Indian flag carrier.

Singapore Airlines disclosed Thursday that it was in “confidential discussions” with Tata to “deepen” the companies’ existing partnership, and a potential merger of Air India and Vistara. Indian carrier Vistara is jointly owned by Tata (51 percent) and Singapore Airlines (49 percent).

Singapore Airlines did not say what that deeper partnership could be, but Reuters reported that it could include a minority stake in Air India.

singapore airlines Boeing 777-200 in Singapore Airlines livery source singapore airlines
(Singapore Airlines)

India, with nearly 1.4 billion people, is widely viewed as one of largest growth markets for aviation around the world. However, airlines have long struggled to penetrate the market that suffers from infrastructure and other constraints. Numerous carriers have tried — and failed — including Jet Airways (the first incarnation) and Kingfisher.

Singapore Airlines described India, and its Vistara investment, as an “integral part” of its multi-hub growth strategy. A stake in Air India would give the Singaporean airline even deeper penetration in the market.

Airlines

Air India Announces Major Fleet Expansion, to Introduce Premium Economy

3 months ago

Air India, the erstwhile Indian state carrier which had been bought by the Tata Group in a $2.4 billion deal earlier this year, announced on Monday that it would look to progressively induct 30 new aircraft from December onwards, over the next 15 months.

With the succesful induction of the 25 narrow-body and five wide-body aircraft, the airline plans to increase its fleet size to 143 by the end of 2023. The airline currently has 70 narrow-body aircraft and 43 wide-bodied planes.

The airline will be leasing 21 Airbus A320neos, four A321neos and five Boeing 777-200LRs, in a bid to expand its fleet and global footprint.

Moving away from its earlier business model, Air India also plans to introduce premium economy seats in the 777-200LRs, similar to its sister airline Vistara, which is a joint venture of Tatas and Singapore Airlines, wherein Tata Sons holds a 51 percent stake.

The Boeing aircraft will join the fleet between December 2022 and March 2023, and would be deployed on routes connecting Indian metropolitan cities to the U.S., the airline said in a press statement.

The airline will be launching a direct flight connecting Mumbai to San Francisco and will also connect Mumbai to JFK and Newark, while Bengluru would receive a three times weekly service to San Francisco. 

The four A321neo aircraft are expected to join the Air India fleet in the first quarter of 2023, while the 21 A320neo planes will be inducted in the second half of 2023.

These new aircraft, together with existing aircraft being returned to service, address an immediate need for more capacity and connectivity, and mark a strong step forward, Campbell Wilson, CEO and managing director of the airline said, adding, “Air India has exciting expansion and renewal plans, of which these new aircraft are just the beginning.”

As part of its plan to expand its fleet, the airline in July announced its decision to allow its pilots fly till the age of 65, while the earlier retirement age for pilots was fixed at 58.

Airlines

Singapore Airlines Veteran Campbell Wilson to Lead Tata’s Air India

7 months ago

Tata Sons has named Campbell Wilson to lead Air India as the group launches its restructuring of the beleaguered flag carrier.

Wilson will join Air India from Singapore Airlines’ budget subsidiary Scoot, which he has led since 2020. He has worked in various roles at Singapore Airlines, a carrier known for high levels of passenger service and quality, since 1996. Wilson’s appointment as CEO of Air India is subject to approval by the airline’s board and regulators.

“Air India is at the cusp of an exciting journey to become one of the best airlines in the world, offering world-class products and services with a distinct customer experience that reflects Indian warmth and hospitality,” Wilson said in a statement. “I am excited to join Air India and Tata colleagues in the mission of realizing that ambition.”

Wilson has his work cut out for him. The Tatas acquired Air India from the Indian government in January after decades of state ownership. The airline has many lucrative assets, including international air route rights to many countries, but has been a perennial loss maker known for poor service under state leadership.

Read the Tata Sons Release

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