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Cabinet clears SIA’s investment in Air India; Vistara to sunset on Nov 11 | Company News

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Passengers attempting to book tickets on flights departing after Nov 11 will be redirected to Air India’s website. (Photo: Shutterstock)


The Union Cabinet on Thursday evening approved foreign direct investment (FDI) of Rs 2,059 crore by Singapore Airlines in Air India, enabling SIA to hold a 25.1 percent stake in the latter. This was the final major approval required to merge Vistara, a 51:49 joint venture between the Tata Group and SIA, into Air India.


Following this clearance, Vistara announced its sunset from November 11. After September 3, its passengers attempting to book tickets on flights departing after November 11 will be redirected to Air India’s website. However, Vistara will maintain its aircraft, schedule, and operating crew under its brand name until early 2025.


The Tata Group had in November 2022 started merging Vistara into Air India, 10 months after it took control of the latter from the government through the disinvestment process. Vistara, which took birth in 2015, operates about 2,391 flights per week. It has a fleet of 70 planes.


Vinod Kannan, chief executive officer (CEO) of Vistara, said, “We are immensely grateful to all our customers for their support and patronage over the last 10 years. As we progress further in our growth journey, we want to emphasise that this merger is about offering them more choice with a larger fleet and a wider network, while elevating the overall travel experience. Vistara and Air India are committed to ensuring that this transition is smooth and hassle-free.”


Campbell Wilson, CEO & managing director of Air India, said the airline received on Thursday evening the formal approval for SIA’s FDI in the future Air India. “This paves the way for us to now commence the remaining steps to merge Vistara and Air India, and is a critical milestone,” he added.


“With the regulatory approvals now in hand, the movement of aircraft and crew from the Vistara Air Operator Certificate to Air India’s has been set for November 12,” he said.


This means that for bookings and travel between now and November 11, nothing changes. “For Vistara flights on or after November 12, the flight numbers will change to Air India ones, even though in nearly all cases the aircraft, schedule and operating crew will be unchanged until early 2025,” he noted.


“From September 3, customers seeking to book flights departing on or after November 12 via Vistara’s website will progressively be redirected to Air India’s site to complete the booking,” he stated.


Wilson clarified that the customers already booked on Vistara flights after November 12 will automatically have their reservations converted to Air India flight numbers. “This will occur in phases during September, and customers will be individually informed when this occurs,” he added.


He stated that the HR teams are working on the transfer of those Vistara employees who have not already been seconded into Air India. “As we now embark on the final stretch of this long and complicated process, let’s maintain the focus and effort to ensure that our collective customers and colleagues experience the smoothest of transitions,” Wilson noted.


Vistara has been a loss making airline since its birth. In 2022-23, the airline recorded a net loss of Rs 1,393 crore. (see table) Since its inception in 2015, Vistara — a 51:49 joint venture between the Tata Group and SIA, has seen an infusion of Rs 9,900 crore.

Vistara had in November 2022 raised Rs 650 crore from its shareholders — the Tata Group and SIA — for its working capital requirements. This was the last time that the airline had taken funds from its parents.

                                                                                                 


    Financial Loss

    Net Loss (in Rs Crore)

     FY16

   400

     FY17

   518

     FY18

   431

     FY19

   831

     FY 20

   1813

     FY21

   1612

     FY22

   2031

     FY23

   1393

First Published: Aug 30 2024 | 1:08 PM IST

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