One year after acquiring Air India and embarking on a major transformational programme for the airline, Tata Group has said the company aims to operate only with two airline brands – a full-service carrier and a low-cost carrier.
Presently, the group’s carrier portfolio besides Air India includes Vistara in the full-service airline domain, with Air India Express and Air Asia India in the low-cost carrier space.
The brands that will continue to operate in the future are Air India and Air India Express. Vistara will, therefore, cease to exist.
While speaking on the fate of Vistara, in which Singapore Airlines (SIA) owns 49 per cent stake, Campbell Wilson, CEO and managing director, Air India said: “Vistara has been a successful airline primarily operating on domestic routes, though in recent years it has expanded in international markets too.
“We will use Vistara merger in Air India to accelerate our transformation programme, as we intend to keep a lot of processes and practices of the former.”
In November 2022, SIA and Tata agreed to merge Air India and Vistara, with SIA also investing US$250 million in Air India as part of the transaction. SIA and Tata aim to complete the merger by March 2024, subject to regulatory approvals. Air Asia India also became a fully-owned subsidiary of Tata Group last November.
Earlier this month, Air India announced a mega order to purchase 470 aircraft from Boeing and Airbus, worth US$70 billion, to support its growth plans. Tata is further investing US$400 million dollar on refurbishments for all seats and inflight entertainment on existing aircraft. It expects to deploy refreshed aircraft on operational routes by the middle of next year.
Air India sees a major opportunity in serving longhaul markets through non-stop flights in Europe and North America. The airline recently resumed non-stop flights between Delhi and Vienna, as well as Mumbai and New York. It also relaunched non-stop service between Delhi and Copenhagen.
Wilson commented: “Considering the size of India’s population, and its diaspora of about 37 million people who are often among the wealthiest in their country of residence, there is an immense opportunity to operate point-to-point in longhaul markets.”
He added that a layover of four to five hours would be inconvenient, thus Air India intends to “fly from just not one hub but multiple ones in the country” to serve more people with “a product that they are wanting but are not getting”.