New Delhi: In order to revive its ailing aviation empire, the huge Tata Group is reportedly mulling a plan to merge its four airline brands under Air India Ltd.
According to the people, who requested anonymity because the talks are private, India's largest conglomerate is also thinking about getting rid of the Vistara brand, which is used by Singapore Airlines Ltd.'s local affiliate in the country of South Asia. According to one of the persons, Singapore Airlines is determining how much stake it should own in the combined company.
Requests for feedback from the Tata Group, Air India, and Vistara representatives went unanswered. In a statement, Singapore Airlines claimed
"discussions are ongoing between SIA and Tata" and that it had nothing further to add beyond an Oct. 13 exchange filing, which said the talks "seek to deepen the existing partnership between SIA and Tata, and may include a potential integration of Vistara and Air India."
With Tata as its new owner, Air India is getting ready for a makeover. The full-service carrier is thinking about placing an order for up to 300 narrow-body aircraft, which would be one of the biggest orders in the history of commercial aviation. Following a "significant" expansion in both narrow-body and wide-body aircraft, Air India Chief Executive Campbell Wilson announced last month that the airline will triple its current fleet of 113 aircraft over the next five years.
Other persons with knowledge of the situation stated in late September that Air India is also in talks to raise at least $1 billion in a capital round that could value the airline at approximately $5 billion. Starting in December, the airline intends to add 25 Airbus SE and five Boeing Co. aircraft from lessors.
In October of last year, Tata was chosen as the winning bidder for Air India after outbidding competitors with a $2.4 billion offer. Under Prime Minister Narendra Modi, the purchase was the most visible privatisation in the nation and put a stop to decades of attempts to sell the financially struggling, indebted carrier that had relied on taxpayer bailouts for years to operate.
Additionally, it meant that Tata had four airline brands: Air India, Vistara, a full-service carrier, and the low-cost Air India Express Ltd. and AirAsia India. Earlier this month, Air India announced that it will buy AirAsia's local subsidiary and combine it with Air India Express to form a single low-cost carrier. By the end of 2023, that consolidation will probably take place.