The Tata Group may be preparing to announce some big changes to its airline holdings in the next few days. According to a new report, Tata will announce that it plans to merge Vistara, AirAsia India, and AI Express into the Air India brand, creating one full-service and one budget carrier in the process. Let's find out more.

Long time coming

While news of a merger is not new by any means, this is the first time we have seen a timeline for such a transition. According to the Economic Times, Singapore Airlines and Tata have come to an agreement, clearing the way for Vistara to be accommodated into the flag carrier. The conglomerate already owns 100% of Air India Express and recently purchased AirAsia's remaining equity in the low-cost carrier.

An announcement is likely within the next week, but the actual transition will take one year. Air India will be the sole airline brand of the Tata's, meaning Vistara and AirAsia India may disappear with the merger. The flag carrier will have two subsidiaries, presumably the full-service Air India and a low-cost arm (potentially retaining the Air India Express name?).

In exchange for dissolving its partnership, Singapore Airlines is expected to take a minority stake in Air India and pick up some board seats in the process. While this will affect SIA's multi-hub approach, the larger Air India will make for a much bigger partner and has the potential to rapidly become a major player in the international market.

Get the latest aviation news straight to your inbox: Sign up for our newsletters today.

Second-largest airline in India

The merged Air India (full-service) would be India's second-largest airline by some distance. The joint carrier would have a market share of nearly 18%, double of competitors Go First and SpiceJet, and creating a distinct hierarchy in the domestic market for the first time since 2019. The low-cost Air India arm would be no slouch either, with a market share of around 6%, putting it sixth-largest in the market.

For Tata, the move will mean simplifying a complicated structure of four airlines into just two, saving millions of dollars and becoming more competitive in the low-margin sector. By fleet size, the group will operate 217 aircraft, still off from IndiGo's 275-strong A320 fleet, but the closest anyone has ever come to challenging it.

We will know much more about the specifics of the merger in the coming days once Tata makes an official statement. The questions to watch out for will include which brands will be retained, how long the mergers will take, and the overall strategy for Air India going forward. If all goes correctly, the Indian domestic market could be looking at a major shakeup, and Air India's goal of 30% market share doesn't seem unachievable anymore.

Get all the latest aviation news right here on Simple Flying

What do you think about Tata's decision to merge its brands under Air India? Let us know in the comments!

Source: The Economic Times

• 

  Air India

  IATA/ICAO Code:

  AI/AIC

  Airline Type:

  Full Service Carrier

  Hub(s):

  Delhi Indira Gandhi International Airport

  Year Founded:

  1946

  Alliance:

  Star Alliance

  CEO:

  Campbell Wilson

  Country:

  India

  Region:

  Asia