Tata Sons has reportedly started the process to bring all its airline entities — Vistara, AirAsia India, and Air India Express — under one umbrella of Air India, according to a report. An announcement regarding this move is expected within a week. Tata Sons will have a low-cost carrier and a full-service airline under Air India post this merger, which may take more than a year to start properly functioning under the umbrella firm.
The report that appeared in the Economic Times added that the process was initiated after holding several rounds of discussions with Singapore Airlines (SIA). It also added the fact that after execution, if it went as per plans, Air India could become the second-largest airline in the country in terms of fleet and market share. The report also added that the Vistara brand may be dropped, with Singapore Airlines expected to be a minority shareholder in Air India. Some board members of the former are expected to be included on the board of Air India.
The Tata’s had earlier completed the consolidation process of Air India Express and AirAsia India after the company bought the remaining stake of the latter. Tata Sons held 51 percent stake in Vistara as per the last available information. Recently, AirAsia Aviation Group Ltd (formerly known as AirAsia Investment Ltd (AAAGL), said it had sold the remaining 16.33 percent stake in AirAsia India (AAI) to Air India Ltd.
"After the transaction closes, AAAGL will not hold any equity interest in AAI, and the brand license and technical services agreement between AirAsia Berhad and AAI will be terminated after 12 months from the date of termination of the shareholders' agreement between the parties or at an earlier date as may be intimated by AAI," the AirAsia Aviation Group added.
The Tatas took over Air India and Air India Express in January. In October 2021, Tatas emerged as the winning bidder for loss-making Air India. It offered a bid of Rs 18,000 crore, comprising a cash payment of Rs 2,700 crore and taking over the carrier's debt worth Rs 15,300 crore.
