(Reuters) -Indian carrier Vistara said on Friday its planes would be operated by Air India from November as a merger between Vistara and the country’s flag carrier gained momentum following a key Indian government approval.
Singapore Airlines, which owns 49% of Vistara in a joint venture with India’s Tata Group said it had received approval for foreign direct investment into an expanded Air India, clearing a significant hurdle in the merger process.
Singapore’s flagship carrier announced a plan to merge the decade-old Vistara and Tata-owned Air India in November 2022, in a bid to create a dominant full-service airline in the domestic and international markets.
India is among the world’s fastest-growing major aviation markets. Global airlines are expanding flights to the country and Indian airlines last year placed record orders for hundreds of new planes.
Singapore Airlines said it expected the merger deal, which Indian and Singaporean antitrust regulators have cleared, to be completed by the end of 2024.
That is delayed from the original target of March, and the airline said the companies were in talks about an extension to the agreed stop date of Oct. 31.
From Sept. 3, it will not be possible to book with Vistara for travel on or after Nov. 12, Vistara said in a statement.
“All Vistara aircraft thereafter will be operated by Air India and bookings for the routes operated by these aircraft will be redirected to Air India’s website,” it added.
Air India staff have been working for months with Vistara on the transition and look forward to offering an expanded network, more flight options and an improved frequent flyer program, the flag carrier’s CEO Campbell Wilson said in a statement.
Air India has said previously the Vistara brand will eventually be retired.
Singapore Airlines, which is the only foreign airline with a direct stake in an Indian carrier, will hold a 25.1% stake in the combined Air India group in return for a $250 million investment.
The Singaporean company is due to invest up to 50.2 billion Indian rupees ($599 million) after the merger is completed, it said on Friday.
India’s Tata took over flag carrier Air India in 2022 and embarked on a multi-million dollar transformation of the former state-run airline.
($1 = 1.3029 Singapore dollars)
($1 = 83.8660 Indian rupees)
(Reporting by Himanshi Akhand and Varun Hebbalalu in Bengaluru, Lisa Barrington in Seoul; Editing by Rashmi Aich and Jamie Freed)
