Tata Group plans to merge carriers under Air India

According to individuals with knowledge of the situation, the Tata Group is mulling a plan to combine its four airline brands under Air India Ltd. as it gets ready to rebuild its ailing aviation empire.

According to the people, who declined to be named because the conversations are private, India’s largest conglomerate is also thinking about getting rid of the Vistara name, which represents Singapore Airlines Ltd.’s local subsidiary in the South Asian country. One of the persons said Singapore Airlines is deciding how much of the combined company it should own.

Multiple efforts for a response from the Tata Group, Air India, Singapore Airlines, and Vistara went unanswered.

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 annals of commercial aviation. Following a “significant” increase 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.

In late September, other persons with knowledge of the situation stated 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 successful 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 state 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, the consolidation will probably take place.