Air India-Vistara merger: What is in store for the flyers?

In the merged entity, Vistara’s junior shareholder, SIA, will hold 25.1 pc stake with a fresh infusion of INR 20.59 billion

Just under 10 years after it first took wings as the latest airline in India and having established itself as the most premier carrier, at least in brand perception, Vistara, a joint venture between the Tata Group and Singapore International Airlines is set to cease operations from November 11 midnight, as part of its ongoing merger with Air India.

From November 12, 2024, Vistara will cease to exist and become a part of the Air India brand, with its flights taking the “AI” code and the latter taking over all Vistara fleet, bookings, landing slots as well as a bulk of personnel, finally completing the merger between the two airlines that had been set in motion almost two years ago.

The merger, announced in November 2022, is part of Tata Group’s plan to streamline its aviation business, which includes integrating Air India and Vistara into a full service airline and Air India Express and Air Asia India, another joint venture, into a low-cost carrier competing in the domestic market.

In the merged entity, Vistara’s junior shareholder, SIA, will hold 25.1 pc stake with a fresh infusion of INR 20.59 billion, for which it has received the clearance from the Indian government.

Through this merger, Air India aims to capture 30 pc of the domestic market share, up from the 24.3 pc share that it had in July, and significantly increase its presence in the international sector over the period of next five years, says the company in a statement.

Although the transition will be gradual, from November 12, 2024, elements of the airline, including airport counters, digital interfaces, and boarding gates, will begin to sport Air India’s colours.

What does it mean for travellers and Vistara loyalists?

There will be no change for travellers who have already booked Vistara for travel on or before November 11, 2024. However, all bookings for the airline after November 11 will now be available only on Air India’s online platforms. Customers flying on Vistara after November 12 will be informed of changes in flight details with all flights being converted to Air India flight numbers.

For members of Club Vistara, the airline’s loyalty programme, Vistara has already initiated a merger of its loyalty programme with that of Air India’s programme “Flying Returns”. While travellers who are members of both Flying Returns and Club Vistara will be given an option to link their accounts, they can also choose to opt out of the transition.

If linked, the existing loyalty points in their Club Vistara programme will be transferred to their AI’s programme without any loss of value. This would also apply to all unutilised One-class upgrade and complimentary flight ticket vouchers.

The merger may also prove to be advantageous to frequently flying members as they will maintain or may even gain a chance to improve their tier status (Silver, Gold or Platinum) based on the total number of points in both programmes combined.

For members who fail to link their account before the merger, the company will initiate an automatic consolidation of their respective accounts.

Can Air India maintain Vistara’s service standards?

Despite the fact that Vistara has always had a large base of loyalists, the airline had not made operating profits for even a single quarter at the time of the announcement of the merger.

Nonetheless, the airline has managed to leave its mark on the aviation industry with fleet of 70 aircraft serving 50 destinations. It also managed to capture 10 pc of the total domestic market share as of July 2024.

The premium airline, since its inception in 2015 has been known to offer top-grade service and meals to its passengers, in contrast to Air India which has often run into trouble because of the condition of its aircraft, notably the ageing Boeing 777s and Boeing 787 Dreamliners as well as its service standards, perceived to be lower than Vistara or other full-service international carriers.

Many loyal Vistara flyers have expressed concern over a potential decline in quality of service and food offered by the merged airline. Industry experts suggest that both, the competion and customers will closely monitor Air India as it undertakes the transition. Many also believe that Vistara’s loyal customer base may not transition to Air India seamlessly.