Vistara-Air India merger takes off

Vistara, India’s premium full-service airline, will merge with Air India on November 12, marking the end of its decade-long journey. This operational merger follows Tata Group’s acquisition of Air India in 2022. From September 3, 2024, Vistara will stop accepting bookings for travel beyond the merger date. Singapore Airlines, a joint venture partner, will own a 25.1 per cent stake in the new Air India.

Vistara will be the second major airline brand in India to fade out within a space of five years, with the previous ones being Jet Airways (that went down in April 2019, about six-and-a-half years after Kingfisher Airlines stopped flying in October 2012).

Sahara Airlines flew into the sunset in 2007 following a merger with Jet. This was followed by several smaller airlines, including AirAsia India, which ceased operations in October 2023, making way for Air India’s AIX Connect, and GoAir, which ceased existing in May 2023.

Vistara was the first airline to offer Premium Economy on Indian skies. The airline also became the first in India to offer a flatbed experience on narrowbody aircraft when it inducted its A321neo, meant to fly to regional international routes.

The airline became the first in India to induct the 787-9 variant of the Dreamliner and the A321LR. It is currently the only airline to operate these types in this country. Even IndiGo, which has XLRs on order, has not yet opted for the A321LR. Additionally, Vistara also came up with a retro livery for one of its aircraft, as a tribute to JRD Tata. Special liveries have been around but a retro claimed the legacy of JRD when Air India wasn’t on the radar for the Tatas, at least publicly.

As Singapore Airlines informed the Singapore Stock Exchange about receiving approvals for Foreign Direct Investment (FDI) into Air India, the last of the hurdles for the merger of Vistara with Air India were overcome. Social media teams published the eventual merger message, followed by communication to stakeholders by the airline on the date of the merger. Starting November 12, 2024, a unified airline will be in operation and Vistara, the iconic brand which Tata Group and Singapore Airlines joint venture set up, will be history. Vistara is quite the opposite of Tata Group’s other Joint Venture — AirAsia India. The interesting journey will end after 3,595 days of operations and Vistara will join the likes of Air Sahara and Air Deccan, which ended their journey with a merger with the latter tying up with Kingfisher Airlines.

The airline has been loved by passengers and often compared to the heydays of flying with the likes of Kingfisher Airlines around. The airline that made the most from the fall of Jet Airways, inducted B737s and ended up using those to launch international services. This also created a gap in its three-class model, with the airline having three-class, dual-class and mono-class aircraft in its fleet — a rarity for an airline which was being positioned as a luxury carrier.

The airline operated over five lakh flights from inception until the end of July. It would add another 30,000 flights by the time it retires in early November. At the end of July, the airline was less than a lakh short of carrying seven crore passengers since inception. It could carry close to 50 lakh more passengers till it ceases to exist in the next few months.

During this transition, Vistara and Air India are committed to maintaining a seamless experience for their customers. Since its launch on January 9, 2015, Vistara has served over 65 million passengers with its fleet of 70 aircraft, including 53 Airbus A320neo, 10 Airbus A321neo, and 7 Boeing 787-9 Dreamliners. Known for setting new standards in aviation, Vistara has connected destinations across India and internationally with exceptional hospitality and service excellence.

Many reforms later, Vistara’s departure is now being felt by passengers who have become used to a certain kind of flying experience. It’s not just the food that Vistara, a 51-49 joint venture between Tata Sons and Singapore Airlines, serves on its flights, but also how it is served.

Its in-flight entertainment units and premium economy seats even on domestic travel only added to its attraction, presenting a contrast with others and prompting some budget airlines to match up. The question is — will the unique legacy of Vistara disappear once the brand merges with Air India or live on to attain many more exceptional milestones?

As they say, the best test of a pudding is to eat it. Depending on the merger’s execution, rebranding Vistara’s fleet of aircraft will take place along with a change of uniform for the airline crew, a revamped menu, reworked roster and personnel allocations, among other reviews and recasts on the backend. All this could translate into months of disruption and inconvenience, adversely impacting the overall flying experience for customers who are shifting from the brand Vistara to the merged brand Air India.

Unlike the past examples of airline brands in India going into the sunset, Vistara’s case has very little to do with its performance. Although it has remained a loss-making entity since its inception and holds a distant second place in the domestic passenger market share behind IndiGo, Vistara has been able to stand out on the overall experience front. Despite recent unrest among the Vistara crew and flight delays due to a variety of reasons, the brand continues to signal quality.

The airline, which claimed to have researched the market well before entering with a luxurious configuration, had to undergo a reconfiguration very early in the cycle and move from 16 Business, 36 Premium Economy and 96 Economy seats on the A320 family aircraft to 8 Business, 24 Premium Economy and 126 Economy. It further underwent a reconfiguration to add a row in Economy class and offer a total of 132 economy class seats, taking up the total seats in the plane to 164. Air India’s three-class seating for its new planes is based on this number, which helps easier integration between the two. Clearly, cutting the Business segment by half and the Premium Economy by one-third during not-so-difficult times for the economy is an indicator of initial estimations having gone wrong.

When it was time to start widebody operations, the pandemic struck and that meant that it ended up operating under the air bubble arrangement. This also meant that it got slots to operate to London Heathrow, which would have otherwise been an impossible task. Overall, it became an airline of choice for foreign carriers to collaborate and partner.

These two conflicting brands — catering to different consumers and possessing different flying experiences will have to prove themselves in the open sky.

It is probably easy to downgrade Vistara to Air India standards. But it is nearly impossible to upgrade Air India to the Vistara brand experience. That would be a tough one, and it would be interesting to wait and watch. Only time will tell if Vistara can fly high with Air India!

Views expressed are personal