Vistara-Air India merger: Industry leaders react

In a bittersweet turn for India’s aviation industry, Vistara, the joint venture between Tata Sons and Singapore Airlines, recently announced its impending shutdown, stirring both nostalgia and respect across sectors. Founded in 2013, Vistara embodied Tata’s storied legacy in Indian aviation, along with Singapore Airlines' service standards, to create a flying experience that redefined air travel in India. Rooted in the spirit of 'Vistaar', meaning limitless expanse in Sanskrit, the airline aimed to offer a seamless, elevated journey, embodying its tagline, ‘fly the new feeling.’

The decision to merge Vistara into Air India stemmed from the Tata Group's vision of creating a single, premier full-service carrier (FSC) that could compete on the global stage. Following the grounding of Jet Airways and Tata’s acquisition of Air India from the government, the group held a monopoly in India’s FSC market. 

In 2022, after gaining ownership of Air India, Tata opted to combine Vistara with Air India rather than pursue separate growth paths for the two airlines, which often operated on overlapping routes with similar aircraft and operational models. Although Vistara had a strong domestic presence, it was relatively unknown internationally. Air India, by contrast, carried a long-standing reputation recognised by both the Indian diaspora and international customers. 

Under the merger agreement, Singapore Airlines, which previously held a 49% stake in Vistara, will retain a 25.1% share in the newly integrated Air India, positioning the airline for growth on both domestic and global fronts.

The merger of Vistara into Air India has reduced India’s domestic aviation market from two full-service carriers to just one, Air India. With no current plans to launch additional FSCs, the Tata Group now holds full control over this segment. This consolidation places India’s domestic aviation in a near-duopoly, with the combined Air India group and market leader IndiGo commanding around 90% of the market share. 

The lack of competition among full-service carriers may impact airfares, potentially leading to price increases, particularly for premium services, as Tata capitalises on its dominant position. While some business groups have shown interest in entering the airline industry, there are currently no formal proposals to establish a new full-service airline to rival Air India.

But, now, as the skies grow quieter without Vistara's presence and it gets merged with Air India, industry leaders reflect on the brand's impact, legacy, and what its departure signifies for customer experience and brand loyalty in Indian aviation.

Sabir Singh, Founder & CCO, Thinkstr.in

Harish Bijoor, Business & Brand-strategy specialist

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Abhishek Jana, VP & Branch Head, Tempest Advertising

Drashti Buch, Category Marketing Lead, JioMart Marketplace

Priya Mathias, Executive Vice President & Head of Marketing and Communication, IndoSpace

Punya Vats, Brand Manager, Garnier Men, L' Oreal India

Lalatendu Mishra, Senior Deputy Editor, The Hindu

Kishore Acharya, SVP & Head of Marketing, Masai & Placed

As Vistara's chapter comes to a close with its merger into Air India, it signals not just the consolidation of power under the Tata Group but also a shift in the landscape of full-service air travel in India. While customers and industry experts alike reflect on what has been lost, the new Air India now bears the responsibility of carrying forward the spirit and standards set by Vistara, paving the way for a new era in Indian and global aviation.