The ultimate approval for Vistara's merger with Air India might come as early as this Saturday when the Cabinet approves Singapore Airlines' (SIA) foreign direct investment in AI. SIA, which held a 49% interest in Vistara, would own 25.1% of the amalgamated airline after spending $2,059 crore, necessitating FDI permission. All other approvals from bodies such as the Competition Commission and the DGCA are already in place. Tatas will own the remaining 74.9% interest in AI.
Following the government's approval of FDI, AI-Vistara will shortly convey merger dates to passengers. People who bought tickets on Vistara flights after the merger date would be advised that their flight will be on Air India, along with the modified flight number and time.
According to sources, the merger will take place after Diwali (November 1), since the airline does not want to take any chances during the high festive travel season. "There will be a fair gap between post-Diwali and the start of fog, which generally occurs after December 20 and causes flight difficulties. According to reports, the merger should take place in that period to address any merger teething concerns, such as alerting Vistara passengers of their modified AI travel data before fog adds more complication to the situation.
Vistara has 70 aircraft that will continue to fly under the airline's livery. When the aircraft is subjected to rigorous inspections, the new livery will be applied. It makes no sense to take out aircraft for painting and risk reducing capacity. According to reports, Vistara aircraft offer a superior cabin product than AI's older jets.
Vistara has previously notified passengers about the transfer of frequent flyer points to AI's reward scheme. The staff transition has already begun, with many Vistara workers now working from AI's new Gurgaon headquarters.
Are there any possibilities that passengers who booked in a certain class of Vistara, say business or premium economy, on a trip that must run after the merger date may be switched to economy on the AI aircraft they travel since the latter's business class may be filled or it may not have a premium economy?
"There are little chances of such things happening," claimed insiders.
AI management previously discussed postponing Vistara's merger. The reason: They intended to update AI aircraft first, and then keep Vistara as the best product transporter. However, due to growing worries among Vistara employees about AI executives taking all major positions in the amalgamated airline, that proposal was scrapped. So, while AI is still a work in progress, the merger will now take place by the end of the calendar year.
