NEW DELHI: The final nod for Vistara’s merger into Air India could come as soon as this Saturday when the Cabinet clears the foreign direct investment by Singapore Airlines (SIA) into AI. SIA, which was 49% stake holder in Vistara, will get 25.1% stake in the merged airline by investing 2,059 crore in it, hence the need for FDI approval. All other nods from agencies like the Competition Commission and DGCA are already in place. Tatas will have remaining 74.9% stake in AI.
After Govt FDI nod, AI-Vistara will shortly communicate timelines of the merger to passengers. People who have booked tickets on Vistara flights post the date of merger will be informed that their flight will be on Air India along with the changed flight number of AI and its time.
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Sources say the date of merger is likely to be after Diwali (Nov 1) as the airline will avoid taking any chances during the peak festive travel season. “There will be a decent window between post Diwali and the onset of fog that usually happens after Dec 20 which leads to flight disruptions. Ideally the merger should happen in that space to sort out any merger teething issues like informing passengers booked on Vistara their changed AI flight details before fog adds further complexity to the equation,” said sources.
Vistara has 70 aircraft which will continue to fly in the airline’s livery. The same will changed to AI’s new livery when the aircraft go in for heavy checks. “Taking out aircraft just for painting purpose and letting capacity take a hit makes no sense. Also Vistara aircraft have a better cabin product than that of AI’s old planes,” said sources.
Vistara had earlier reached out to passengers informing them about the transfer of frequent flyer miles to AI’s loyalty programme. The movement of personnel has already started, with many Vistara employees now operating from AI’s new Gurgaon headquarters.
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Are there chances that passengers who have booked on a certain class of Vistara, say business or premium economy, on a flight that has to operate after the date of merger being shifted to economy on the AI flight they take as the latter’s business may be full or it may not have a premium economy? “There are little chances of such things happening,” said sources.
AI management had last considered toyed with the idea of postponing Vistara’s merger. The reason: They wanted AI planes to be upgraded first and till then retain Vistara as the better product carrier. However given mounting concerns among Vistara employees about AI officials getting all key posts in the merged airline, that plan was shelved. So even as AI remains very much a work in slow progress, the merger is now going to happen before the end of this calendar year.
Graphic points:
What the two-in-one AI will be fleet wise:
AI current fleet: 141 of which 60 are wide bodies
Vistara fleet: 70 of which 7 are wide bodies
When two merged: 211 aircraft with 67 wide bodies plus any new deliveries that take place till then
