The much-awaited merger between Vistara and Air India is poised to advance with Singapore Airlines (SIA) anticipated to grant final approval for a foreign direct investment (FDI) stake soon. SIA, which currently holds a 49% stake in Vistara, is expected to invest Rs.2,059 crore to secure a 25.1% share in the combined airline. The Tata Group will retain a 74.9% stake in Air India.

Regulatory approvals from the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA) are already in place. Once the FDI approval is finalized, the new merger timeline will be communicated to passengers, including those with bookings on Vistara flights post-merger. They will be updated with new flight numbers and schedules.

The merger is expected to be completed around November 1, just after Diwali, to minimize disruptions during the busy festive travel period. This timing allows the airline to resolve initial merger issues before facing the challenges of winter fog, which typically starts around December 20.

Vistara's fleet of 70 aircraft will continue to fly in its current livery until they undergo major maintenance, after which they will be repainted in Air India's colors. It is noted that repainting aircraft solely for this purpose is impractical, especially given Vistara's newer fleet and superior cabin quality compared to Air India's older planes.

Key developments in the merger process include transferring Vistara's frequent flyer miles to Air India's loyalty program and relocating Vistara employees to Air India's headquarters in Gurgaon. Concerns about potential downgrades for Vistara passengers in business or premium economy classes have been addressed, with assurances that such instances will be infrequent.

Initially, there was a plan to delay the merger until Air India's fleet was upgraded, to maintain Vistara as a premium service provider. However, this plan was scrapped due to concerns from Vistara employees regarding job security and key positions. Consequently, the merger will proceed before the end of the year, even as Air India's broader transformation continues.

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