Air India-Vistara integration would aid Tata Group’s expansion ambitions
Air India is planning significant merger and fleet moves as it looks to strengthen its competitive position in the dynamic Indian aviation market.
The potential integration of Air India and its joint venture airline Vistara would deliver some of the consolidation that was expected to result from the recent privatisation of the country's flag carrier.
Air India's new owner, the Tata Group, intends to grow the airline's market share dramatically. Merging some of the group's multiple airline holdings will help it achieve this, but it also needs organic growth.
To this end, Air India plans to lease 30 aircraft to boost its network. It is also likely to place orders for new aircraft: it has no orders on its books and will need them to at least to account for fleet renewal.
The sudden flurry of activity by Air India is a welcome development after it has spent years in limbo while the government tried to find a buyer. The arrival of the COVID-19 pandemic also stalled its plans, but now the Indian market is booming again, and growth is back on the agenda.
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