Competition Commission of India approves Air India-Vistara merger, subject to certain conditions

NEW DELHI: It’s officially curtains for Vistara with the Competition Commission of India (CCI) on Friday approving its merged into Air India. The Tatas plan to have a mega full service carrier (FSC) by merging Vistara and AI and a big low cost carrier (LCC) by merging AirAsia India into AI Express. While the LCC merger is on track for this year-end, the FSC merger has to be completed by next March.
Vistara is 51% owned by Tatas and 49% by Singapore Airlines. Post merger, SIA will have 25.1% stake in the new Air India and Tatas the rest. “CCI approves the merger of Tata SIA Airlines (Vistara) into Air India, and acquisition of certain shareholding by Singapore Airlines in Air India subject to compliance of voluntary commitments offered by the parties,” CCI Tweeted on Friday.
“As part of the merger transaction, SIA shall also invest Rs 2,059 crore in Air India. Post the consolidation, SIA shall hold 25.1% shareholding in Air India,” the Tata Group had said while announcing the proposed merger.

The big worry, from passengers’ perspective, has been that given the time AI’s narrow and wide body fleet upgrade will take, Vistara — whose cabin product has is seen to be high quality — could be missed till the Maharaja revamp is complete a few years down the line.
Allaying those fears, Vistara CEO Vinod Kannan had told TOI recently that: “We want to assure our patrons that they will not be forced to settle for an inferior product. They will not be shifted to anything that is a sub-par product and that their expectations from Vistara will be met by the merged airline.” When asked what features of Vistara he would like to see in Air India, he had listed three: “The processes; the people and the way we handle customers.” Kannan is tipped to get a senior level role in the merged AI.
Last June, CCI had approved merger of AirAsia India into AI Express. This February, Tatas had placed a mega order for 470 aircraft for both the in-the-works merged FSC and LCC. Air India revamp is taking longer than originally expected due to supply chain constraints. AI has been inducting new wide bodies as an interim arrangement till its ordered twin aisles start joining the fleet. The airline will get 20 modern wide bodies by March 2024 — six new Airbus A350s and 14 Boeing 777s. And then, the airline will begin the overhaul of its old wide body fleet of Boeing 777s and 787s under a $400 million project.