In the recent aviation news, Vistara Airlines is all set to merge with Air India۔ Air Vistara is the joint venture of Tata Group and Singapore Airlines۔ This consolidation will initiate a major shift in India’s aviation industry. A part of Tata’s effort to organize its airline businesses together, this would result in Air India being the sole full-service carrier that the country will have. There are now just two full service airlines in the country following the merger. Budget airlines have already dominated the domestic skies.
One decision that has further underscored this trend is that of the “Vista Airlines merge with Air India”. These changes have resulted from various full-service carriers disappearing in the last 17 years. Once active players like Kingfisher Airlines, Air Sahara, and Jet Airways have either ceased operations or moved to other brands, as is the case of JetLite after the acquisition of Air Sahara by Jet Airways.
Vistara Airlines merge with Air India: What will happen to India’s full-service airline now?
Now it is only up to the airlines such as Air India to provide those conventional comforts to their customers tied up with a carrier operating on a full-service air line, a meal and better seats included in the cost of ticket.
Budget airlines, which have recently become highly profitable.
Most of the low-cost operators aim for profitability on given set of routes and on ancillary revenue-generating areas. The airlines have managed to reduce costs also through the use of one type of aircraft. IndiGo is the market leader in this space in India, seizing the market leadership position with its no-frills, low-cost strategy. Though it recently launched a business class on specific routes, it still essentially operates as a low-cost airline and hasn’t yet branded itself as a full-service airline.
Singapore Airlines will hold at 25.1% in Air India post-merger from an existing holding of 49% by Singapore Airlines in Vistara. This follows more than a decade since the opening of the airline sector to foreign investment by India’s former Prime Minister Manmohan Singh cleared the way for foreign carriers, such as Singapore Airlines, to invest in Indian aviation. A combination with Tata will help Tata realize its broader ambitions in aviation in preparation for expanded Air India services under a consolidated, full-service model.
Also, see: Yogendra Yadav shares very sad experience with Air India travel