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Now that Tatas have taken over Air India, what happens to Vistara, JV with Singapore Airlines

An industry watcher says SIA tying up with AI is a natural progression. For Vistara and AI to continue as two full fledged FSCs in India they will fight and compete with each other.

January 27, 2022 / 07:52 PM IST

The process of transferring Air India to the Tata group was completed on Thursday, January 27. Soon after, the group issued a statement to the BSE, announcing the completion of the purchase of Air India from the government of India.

“Best wishes to the new owners,” Minister of Civil Aviation Jyotiraditya M. Scindia tweeted. “I am confident that the airline will bloom under their wings, and pave the way for a thriving & robust civil aviation industry in India.”

The question that arises now is whether Singapore Airlines (SIA), which holds a 49 per cent stake in Vistara, the other Tata-owned airline, will also come on board Air India. The Tatas also have a stake in AirAsia India.
According to industry watchers, SIA has already lost a great opportunity by not being a part of the Tata group’s bid for AI. “India is a great source market for outbound traffic and only a small percentage of the market has been tapped by existing airlines. If SIA was invested with the Tatas in the successful bid for AI it could have been in the driver’s seat in setting policy, getting in people to run the airline, aligning aircraft and routes so that SIA and AI offer more choices to passengers in the Indian and global market,” a veteran with four decades of experience in aviation said.

He added that SIA not being on board AI right now perhaps has to do with the fact that it is running in losses and like airlines across the world has been hit by the COVID-19 pandemic. He, however, maintains that it is only a question of time before SIA comes on board AI.