Air India-Vistara Merger Expected To Be Complete By Mid-2025: Vinod Kannan

Full-service carrier Vistara's proposed merger with Air India is expected to be completed by mid-2025, and all legal approvals for the transaction are anticipated by the middle of this year, a top executive said on Monday.

Asserting that it is going to be a 'merger for growth', Vistara CEO Vinod Kannan said it would look to take the airline's consumer-focused services, operational excellence and staff into the merged entity.

In November 2022, the Tata Group announced the merger of Vistara with Air India under a deal wherein Singapore Airlines will also acquire a 25.1% stake in Air India.

Vistara, a joint venture between Tatas and Singapore Airlines, currently has a fleet of 67 planes and operates around 320 flights daily. It expects to have three more planes, including a Boeing 787, by April this year and that will take its total fleet size to 70.

The airline, which will be completing nine years of operations on January 9, is financially doing better than last year, Kannan said at a briefing.

'We broke even in the last quarter of last year (2022-23). From October 2022 to July 2023, we were in the black but then like for most other airlines, July, August, September and October were the weakest months, and we had to take some losses there... December has been a very strong month,' he said.

Kannan said the legal approvals for the merger are expected by the middle of 2024, and the operational merger is anticipated by early or middle of next year.

He also said that all competition approvals are expected in the current quarter ending March.

On Sept. 1, 2023, the Competition Commission of India approved the proposed merger.

At the end of 2023, about 35% of Vistara's capacity was deployed on international routes and the remaining 65% on domestic routes.

'There were 16% more flights from December 2022 to December 2023. That is in terms of departures,' Kannan said and added that the airline will not be operating flights to the US and will focus on Europe and Southeast Asia.

About the last nine years, Kannan said one of the biggest learnings is that scale matters. 'We have matured over time; trying to make sure customer is at the centre of everything... we hope that in time we will be able to carry this on to Air India as well,' he added.

Regarding the merger process, the Vistara chief said, 'We want to make sure that everyone in Vistara does have a role (in the merged entity). It is not a merger for cost-cutting or efficiencies, it is a merger for growth'.

He also said there is no need for any additional injection of funds from the shareholders and that the airline has been able to manage with its own cash flow.

Meanwhile, Vistara plans to use virtual reality and augmented reality technologies for certain training activities for the staff and Kannan emphasised that there is always going to be a place for human intelligence as certain situations cannot be handled by bots.