Vistara's Farewell: A New Era for Air India

The merger of Vistara into Air India marks significant changes in the Indian aviation sector, reducing full-service carriers to one. This merger involves Singapore Airlines holding a stake in Air India and highlights the evolving aviation landscape after foreign direct investment reforms.

On Monday, Vistara will merge into the Air India Group, leaving the Indian aviation sector with only one full-service carrier. This development marks a significant moment for the industry, which has witnessed a shift from five full-service carriers over the past 17 years.

The merger comes on the heels of Singapore Airlines acquiring a 25.1% stake in Air India, following the integration of Vistara, which was co-owned with the Tata Group. This strategic move is part of broader changes in the aviation space after foreign direct investment norms were liberalized in 2012 under the then UPA government, allowing foreign airlines to invest up to 49% in domestic carriers.

With increased air traffic and evolving travel behaviors, low-cost carriers like IndiGo lead the skies. While full-service carriers focus on passenger comfort and comprehensive services, the distinction with budget airlines is diminishing. Nonetheless, Air India emerges as the sole full-service player amidst financial and operational shifts in the landscape.

(With inputs from agencies.)